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Asian Stocks Up, Investors Digest Potential U.S. Tax Hikes

Stock MarketsApr 22, 2021 10:47PM ET
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By Gina Lee – Asia Pacific stocks were mostly up Friday morning, steadying after broad-based declines in their U.S. counterparts, as investors continue to digest a U.S. proposal for higher taxes to fund the country’s latest social plan.

Japan’s Nikkei 225 fell 0.74% by 10:37 PM ET (2:37 AM GMT), with the government preparing to declare a COVID-19 state of emergency in Tokyo, Osaka, Kyoto and Hyogo prefectures from Apr. 25 to May 11. Eateries serving alcohol, establishments with karaoke equipment and commercial facilities with floor space of 1,000 square meters and over will be asked to close as part of the latest measures.

South Korea’s KOSPI inched up 0.10% while in Australia, the ASX 200 edged down 0.15%.

Hong Kong’s Hang Seng Index jumped 1.15%. China’s Shanghai Composite was up 0.49% and the Shenzhen Component rose 0.69%

U.S. President Joe Biden will reportedly propose almost doubling the tax on capital gains to 39.6% for those earning more than $1 million a year.

Investors are also keeping an eye on the ongoing earnings season, and the latest batch of mixed results. While AT&T Inc. (NYSE:T) beat earnings estimates and saw its shares jump on Thursday, Intel Corporation (NASDAQ:INTC) reported falls in both data-center revenue and gross profit margins. Shares in the biggest chipmaker globally slid after the close of the previous session as a result.

“For the short term most likely we’ll continue to see volatility as investors will use the current environment to capture gains,” Matthews International (NASDAQ:MATW) Capital Management LLC. portfolio manager Teresa Kong told Bloomberg.

However, rising numbers of COVID-19 cases globally continued to dampen investor sentiment. India hit a fresh global record of 314,835 cases on Thursday, with bodies piling up at crematoriums and burial grounds as the latest, brutal wave of the virus continues to hit the country. Several countries moved to restrict the number of flights from India, including Singapore, the UAE and Australia.

World Health Organization Director-General Tedros Ghebreyesus appealed to governments and companies that “control the global supply” of COVID-19 vaccines to share supplies and know-how to make distribution more equitable.

The European Central Bank’s policy decision handed down on Thursday, and further assurance from President Christine Lagarde that pullbacks in the central bank’s emergency bond-buying program are not under discussion even amid improving economic data, also failed to make a dent in markets. Investors now await the U.S. Federal Reserve’s policy decision due to be handed down in the following week.

Stocks did get a boost on the data front, with fewer-than-expected 547,000 initial jobless claims filed in the U.S. during the past week. Forecasts prepared by had predicted 617,000 claims while 586,000 claims were filed during the previous week.

Asian Stocks Up, Investors Digest Potential U.S. Tax Hikes

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