The plunge in China equities dominated Asian markets after the government further tightened its crackdown on Tencent and completely torpedoed the multi-billion student tuition sector over the weekend. Although Wall Street closed at record highs on Friday, lifting early trading in Asia, regional markets turned south after China opened.

Only the Nikkei 225 has risen today, climbing 1.05% and seemingly piggybacking the robust New York close, with the uneventful start to the Olympics lifting sentiment. The Kospi, meanwhile, has fallen by 0.50%, with Taipei dropping by 0.65%.

China markets are under siege, with the Shanghai Composite plunging 2.20% and the CSI 300 2.30%. Hong Kong, replete with China tech listings, has plunged by 2.90%, with talk of tightening local government financing adding to the credit concerns in Hong Kong-listed property developers as well. With China’s government seemingly ambivalent to stock market ructions, something that surprise precisely nobody, mainland China and Hong Kong markets are set to suffer a repricing by investors globally of their risk premia this week.

One beneficiary of today’s China turmoil appears to be Bitcoin and Ethereum. Bitcoin is 8.35% higher at USD 38,400, and it appears that some defensive rotation, probably from mainland investors, is occurring.

Across Asia, Singapore has fallen 0.55%, with Kuala Lumpur down 0.30% and Manila down 1.10%. Jakarta has bucked the trend to be up 0.30%, while Bangkok markets are closed today. Australian markets are treading water between China concerns and a resplendent Wall Street. The ASX 200 and All Ordinaries are unchanged for the day.

US index futures are also lower this morning, notably the Dow Jones, with its higher beta to world growth. China nerves have sent it 0.40% lower, while the S&P and Nasdaq futures are 0.20% lower. European stocks are likely to open cautiously this afternoon, notably countries such as Germany, with high exposure to the China growth story. However, US markets are set to remain insulated, with US tech earnings and the FOMC the main points of influence on Wall Street this week.