Markets in Asia mostly fell Monday morning, led by Hong Kong after Beijing at the weekend further cracked down on China's tech firms, while education companies were hammered as the government unveiled sweeping reforms of the sector.

The broad losses across the region came as traders continued to fret over the fast spread of the Delta coronavirus variant, which has sent infections spiking and forced some governments to reimpose economically painful lockdowns or other containment measures.

The selling extended from Friday, despite a strong lead from Wall Street, where all three main indexes ended at record highs with the Dow ending above 35,000 for the first time.

Investors have a packed agenda of possible market-moving events this week including the Federal Reserve's latest policy meeting, US economic growth data, and earnings from some of the world's biggest firms such as Apple and Amazon.

They will also be keeping tabs on a meeting between US Deputy Secretary of State Wendy Sherman and Chinese Foreign Minister Wang Yi later in the day, the highest-level visit by the Biden administration.

The talks come at a time of increasingly strained relations between the superpowers, who have cracked heads over a range of issues including technology, Hong Kong and human rights.

Hong Kong sank more than two percent with education companies battered after China on Saturday unveiled reforms that will massively change the way they do business.

Beijing said the sector had been "hijacked by capital", adding that would prevent firms that teach school curriculums from making a profit, raising capital or going public.

Bitcoin in recovery

JP Morgan Chase analysts said it was uncertain whether firms could continue to be traded on stock markets under the new regime, adding that "in our view, this makes these stocks virtually un-investable".

New Oriental Education & Technology Group crashed 38 percent in Hong Kong, having dived a similar amount Friday as speculation about the move circulated on social media. Its New York-listed shares collapsed 54 percent.

Koolearn Technology dived more than 30 percent and China Maple Leaf Educational Systems shed more than 10 percent.

Tech firms also took a hit in response to Beijing's latest moves against the sector as it told Tencent to relinquish its exclusive music label rights, saying the firm had violated antitrust laws.

Tencent bought a majority stake in rival China Music Group in 2016, effectively controlling more than 80 percent of exclusively held music streaming rights domestically, the State Administration for Market Regulation said in a statement.

Tencent fell more than seven percent and Alibaba was off five percent.

In other markets, Shanghai dropped more than two percent, as did Manila, while there were also losses in Singapore, Seoul, Wellington and Taipei.

But Tokyo was one percent up as traders returned from a four-day weekend break, while Sydney, Mumbai and Jakarta also edged up.

Still, observers remain upbeat about the outlook for the world economy and equity markets, helped by a strong earnings season so far.

"The macro narrative remains one of a post-pandemic recovery," said Chris Iggo at AXA Investment Managers, though he added that "continued pandemic risk is likely to be a recurring source of 'risk-off' events in the financial markets."

Bitcoin pushed to within touch of the $40,000 mark in Asian trade as investors were cheered by more supportive comments from Tesla tycoon Elon Musk.

The highly volatile digital unit has rocketed around 30 percent since falling below $30,000 last week.

It hit an intra-day high of $39,681 Monday before easing slightly. However, it is still well off the record near $65,000 seen in April.