Asian market freezes as Covid-19 continues to soar
Asian markets edged down on Friday as concerns over economic growth and virus outbreaks weighed on sentiment and risk aversion established following dovish comments from the Federal Reserve chief.
Fed Chairman Jay Powell reiterated the central bank’s plan to maintain stimulus initiatives until the economy fully recovered, while Treasury Secretary Janet Yellen warned inflation would remain high for the coming months.
“I think we’ll have several more months of rapid inflation yet, so I’m not saying this is a one-month phenomenon,” Yellen said in an interview on CNBC after markets closed. Americans.
However, she predicted that price increases would reach “normal levels” in the medium term.
Wall Street ended mixed, with the Dow Jones closing slightly higher while the other two major indices retreated.
“US stocks fell after a second day of conciliatory testimony from Fed Chairman Powell provided new catalysts for buying risky assets,” said Edward Moya of OANDA.
“Risk aversion is firmly in place, possibly because the profit bar may have been set too high for banks and because reopening trade cannot pick up its pace. helped China’s economic growth to fall below expectations overnight, ”Moya added.
Asian markets were mostly down, with Tokyo closing 1% as investors cautious about expanding Covid-19 infections and the Bank of Japan slashing its GDP growth forecast for the current fiscal year.
“Investors are worried about a spike in infection in Tokyo ahead of the Olympics,” Shinichi Yamamoto, broker at Okasan Securities, told AFP.
– Biden warning on Hong Kong –
Hong Kong closed flat as late profit-taking erased earlier gains before an advisory from US President Joe Biden expected later Friday, warning companies to do business in the city as Beijing tightens its grip.
“The situation in Hong Kong is deteriorating. And the Chinese government is failing to keep its commitment to do the way it would deal with Hong Kong,” Biden said Thursday at a press conference with German Chancellor Angela Merkel, signaling no imminent improvement in China. -American relations.
Shanghai closed 0.7% lower while Seoul, Taipei, Kuala Lumpur and Bangkok also fell. Wellington was flat while Sydney, Singapore and Jakarta rose.
European stocks opened higher, London up 0.5% as markets ignored Asian losses and virus concerns.
Investors were also awaiting US retail sales for June expected later today for the latest indication of the state of the economic recovery.
“As the United States is doing well on vaccine rollout plans and reopening the economy, with theme and vacation parks reopening as well, the increase in cases we are seeing now seems to be fueling a sentiment. overwhelming caution in consumer spending habits which seems to temper retail sales, ”said Michael Hewson, chief market analyst at CMC Markets UK.
The two main oil contracts were trading slightly higher in Asian trade, with WTI down 3.9% on the week while Brent was down 2.7%.
– Key figures around 0820 GMT –
Tokyo – Nikkei 225: DOWN 1.0% to 28,003.08 (close)
Hong Kong – Hang Seng Index: FLAT at 28,004.68 (close)
Shanghai – Composite: DOWN 0.7% to 3,539.30 (close)
New York – Dow: UP 0.2% to 34,987.02 (close)
London – FTSE 100: Up 0.4% to 7,041.96
Euro / dollar: LOWER to $ 1.1806 from $ 1.1813 at 9:00 p.m. GMT Thursday
Pound / dollar: up $ 1.3846 from $ 1.3832
Euro / pound: DROP to 85.27 against 85.41 pence
Dollar / yen: UP to 110.10 from 109.82 yen
North Sea crude brent: up 0.10% to $ 73.54 per barrel
West Texas Intermediate: EN up 0.04% to $ 71.68 per barrel
mtp / oh