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Asian markets were mixed Friday as the euphoria over an expected flurry of US interest rate cuts next year was offset by a tech-led plunge in Hong Kong after China unveiled fresh plans to restrict online gaming.
Equities have been on an upward trajectory in recent weeks as a string of figures show inflation coming down and the jobs market softening, while the economy is easing but appears safe from recession.
The surge suffered a blip in the middle of the week as traders took a breather, with analysts saying the advance may have gone a little too fast, but they were back on their horse Friday following a strong run-up on Wall Street.
That came on the back of data showing that the US economy grew slightly less than first thought in the third quarter.
The readings were "in line with the narrative that a cooling economy will keep the Fed on track to cut rates in the not-too-distant future", Chris Larkin, at E*Trade from Morgan Stanley, said.
"That sentiment has played a big role in the market's recent surge."
Focus is now on the release of the closely watched personal consumption expenditures (PCE) price index, decision-makers' preferred gauge of inflation, which could be key for the Fed's meeting next month.
Bank officials sent markets racing last week when they held rates and released their "dot plot" forecast for rates suggesting they would cut several times next year, but observers said investors were confident that more than that are in store.
Traders are betting on about 150 basis points of reductions, according to Bloomberg News, twice as much as policymakers have indicated.
All three main indexes on Wall Street rose Thursday, with the Nasdaq and S&P 500 piling on more than one percent, and analysts said the fact that trades are still snapping up stocks when they were overbought was a good sign for the market outlook.
Asia built on the US lead in the morning but the news out of Beijing took the wind out of the sails.
Tokyo, Singapore, Wellington, Taipei, Manila, Mumbai and Jakarta all rose.
But Hong Kong reversed an early rally and sank more than one percent after China unveiled proposals that would put limits on recharging in-game wallets and abolish features meant to increase gameplay.
The news sent tech giant Tencent plunging more than 15 percent in Hong Kong -- wiping more than $50 billion off its valuation, Bloomberg reported -- while rival Netease was down more than 30 percent.
XD Inc sank around 20 percent, while there were also losses for Alibaba and Meituan.
Shanghai also fell, while Sydney, Seoul and Bangkok were marginally lower.
"This will deal a blow to the overwhelming majority of games in China, except those that sell copies," Zeng Xiaofeng, a vice president at Niko Partners, said.
"Companies will need to overhaul their monetisation models, including how they charge money from different tiers of players."
- Key figures around 0700 GMT -
Tokyo - Nikkei 225: UP 0.1 percent at 33,169.05 (close)
Hong Kong - Hang Seng Index: DOWN 1.5 percent at 16,369.38
Shanghai - Composite: DOWN 0.1 percent at 2,914.78 (close)
Dollar/yen: UP at 142.31 yen from 142.14 yen on Thursday
Euro/dollar: DOWN at $1.1000 from $1.1013
Pound/dollar: UP at $1.2700 from $1.2690
Euro/pound: DOWN at 86.61 pence from 86.76 pence
West Texas Intermediate: UP 0.9 percent at $74.53 per barrel
Brent North Sea crude: UP 0.8 percent at $80.05 per barrel
New York - Dow: UP 0.9 percent at 37,404.35 (close)
London - FTSE 100: DOWN 0.3 percent at 7,694.73 (close)
P.Grant--TFWP