Asian shares were mostly lower Wednesday as surging virus counts and China-U.S. tensions weighed on sentiment.

Hong Kong’s Hang Seng dropped 0.8% after authorities arrested dozens of pro-democracy figures, including lawmakers. A move by the Trump administration to further sanction Chinese companies fueled unease over tensions between the two biggest economies.

Shares also fell in Tokyo, Shanghai and Sydney, despite broad gains on Wall Street on Tuesday as stocks regained their footing after starting out 2021 with their worst loss in months amid the worsening pandemic and potentially market-moving U.S. Senate elections.

Political parties and local media said Hong Kong police arrested about 50 pro-democracy figures Wednesday for allegedly violating a national security law by participating in an unofficial primary election last year held to increase their chances of controlling the legislature.

Those arrested on suspicion of subversion included former lawmakers and pro-democracy activists, the South China Morning Post and online platform Now News reported. It was the largest move against Hong Kong’s democracy movement since Beijing imposed the national security law in the semi-autonomous territory in June.

Hong Kong-trade shares in major Chinese telecoms companies China Telecom, China Unicom and China Mobile were mixed after reports said the New York Stock Exchange might opt to delist the three huge companies, complying with an order from the U.S. government, despite having announced on Monday that it would not abide by the request.

In U.S. trading, China Telecom gained 8.8% on Tuesday but lost 2.1% in after hours trading. China Mobile jumped 9.3% but lost 2.2% in after hours trading and China Unicom surged nearly 12%, and then fell 2.9%.

Meanwhile, President Donald Trump signed an executive order banning transactions with eight Chinese apps including Alipay and WeChat Pay in an escalation of a trade war he has been waging through most of his term. However, the order takes effect in 45 days, when Joe Biden will be president, so its impact is unclear though it is likely to further rile friction with Beijing.

Alipay is a widely used digital wallet that is part of the empire of e-commerce billionaire and Ant Group founder Jack Ma. WeChat Pay is a rival service operated by tech giant Tencent. The others named in the order are CamScanner, QQ Wallet, SHAREit, Tencent QQ, VMate and WPS Office.

Japan's Nikkei 225 index lost 0.4% to 27,036.51 and the Kospi in South Korea fell 0.2% to 2,987.17. The Hang Seng gave up 240 points to 27,409.35. In Australia, the S&/ASX 200 dropped 1.3% to 6,595.10. The Shanghai Composite index slipped 0.2% to 3,522.72.

On Tuesday, the S&P 500 rose 0.7% to 3,726.86, recovering about half of the index's losses from a day earlier. The majority of big stocks in the S&P 500 notched gains, with oil producers leading the way as crude prices strengthened.

Stocks of smaller companies did even better than the broader market, driving the Russell 2000 index of small-caps to a market-leading 1.7% gain, at 1,979.11.

The Nasdaq composite picked up 1%, to 12,818.96. The Dow Jones Industrial Average added 0.6% to 30,391.60.

Investors remain optimistic that the U.S. economy will recover this year as more Americans receive coronavirus vaccinations. Optimism is being kept in check as new infections climb at frightening rates around the world, threatening to bring more lockdown orders.

That’s undermining confidence that support from central banks and governments can keep economies afloat until a big recovery sweeps the world later this year thanks to rollouts of COVID-19 vaccines.

Traders have also focused on the outcome of the runoff elections in Georgia Tuesday, which will determine which party controls the Senate. Some analysts say the results could mark clear winners and losers in the stock market.

The general thinking is that a Democratic sweep would open the door to higher tax rates, tougher regulation on businesses and other potentially profit-crimping changes from Washington. That would put broad pressure on the stock market, with Big Tech stocks in particular perhaps attracting more regulatory scrutiny.

But Democratic control of the Senate, White House and House of Representatives would likely make another dose of big financial support for the economy more likely. Democrats have lobbied for $2,000 cash payments to go to most Americans. They also could push for more spending on infrastructure projects.

Such stimulus could eventually lead to higher inflation across the economy, something that has been nearly nonexistent for years. Increasing inflation expectations have helped buoy Treasury yields recently, and the yield on the 10-year Treasury rose to 0.99% on Wednesday from 0.95% Tuesday and 0.90% late Monday.

Surging energy stocks also indicate investor optimism that an economic recovery will drive up demand for oil, pushing prices higher. Occidental Petroleum jumped 10.1% for the biggest gain in the S&P 500.

The price of U.S. crude oil climbed 4.9% on Tuesday and gained 17 cents to $50.10 per barrel on Wednesday.

Brent crude, the international standard, picked up 32 cents to $53.92 per barrel.

The U.S. dollar rose to 102.79 Japanese yen from 102.70 yen late Tuesday. The euro slipped to $1.2287 from $1.2301.

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AP Business Writers Stan Choe, Alex Veiga and Damian J. Troise contributed.