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Shares were mostly lower in Asia on Monday, where Tokyo advanced while markets in Hong Kong and Shanghai fell sharply.

Fresh news of regulatory moves against Chinese IT and education industry companies pulled shares lower in Hong Kong and Shanghai.

In Japan, preliminary pgslot factory and service activity surveys showed a slowdown linked to recent tightening of pandemic precautions due to surging coronavirus cases.

The flash purchasing managers index for the services sector fell to 46.5 in July from 48 in June, on a scale of 1-100 where 50 marks the break between expansion and contraction.

Manufacturing remained in expansion, but fell to 50.5 from 50.7 in June, said the au Jibun Bank survey. It said new export orders declined, possibly reflecting supply bottlenecks. Output fell at the fastest pace in six months.

“Short-term disruption to activity is likely to continue until the latest wave of COVID-19 infections passes and restrictions enacted under the state of emergency laws are lifted," Usamah Bhatti, economist at IHS Markit, said in a report.

Nonetheless, Tokyo's Nikkei 225, tracking Wall Street's strong finish on Friday, gained 1% to 27,833.29. In Australia, the S&P/ASX 200 was unchanged at 7,394.30, while the Kospi in Seoul declined 0.9% to 3,240.46.

Hong Kong's Hang Seng sank 3.5% to 26,374.26 after Chinese regulators said they were further tightening restrictions on technology companies, requiring a “rectification" of misleading pop-up windows and other practices by software applications, or apps. The Shanghai Composite index dropped 2.3%. to 3,467.44.