By Gina Lee
Investing.com – Asia Pacific stocks were mostly down on Friday morning, with U.S. counterparts ending the previous session on a record close thanks to strong earnings. However, concerns about the spread of COVID-19 cases globally eased slightly.
Japan’s Nikkei 225 inched up 0.05% by 10:33 PM ET (2:33 AM GMT), even as shares in Nintendo Co (OTC:NTDOY). Ltd. (T:7974) fell after a profit miss.
South Korea’s KOSPI was down 0.34% as Kakao Bank made its market debut, and in Australia, the ASX 200 inched down 0.02%.
Hong Kong’s Hang Seng Index was down 0.26%.
China’s Shanghai Composite was down 0.37% while the Shenzhen Component was down 0.23%. Shares in liquor and e-cigarette companies tumbled on Thursday as they could be next in line for stricter curbs, following sectors such as private education and technology.
Shares in Kuaishou Technology (HK:1024) saw a record fall after a post-listing lockup on sales expired.
U.S. Treasuries continued their retreat, while the Bank of England indicated inflations concerns as it handed down its policy decision on Thursday. The Reserve Bank of India is due to hand its own decision down later in the day.
Investors digested a second weekly drop in U.S. initial jobless claims, with 385,000 claims submitted during the past week. However, the focus is now squarely on the latest U.S. jobs report, including non-farm payrolls, due later in the day.
Data that is weaker than expected could exacerbate concerns about the economic recovery from COVID-19, with the opposite likely benefitting reflation trades linked to economic reopening if investors look past the argument that the U.S. Federal Reserve could begin asset tapering sooner than expected.
“While uncertainty over monetary policy is likely to cause further bouts of volatility, we believe the Fed’s move toward tapering is unlikely to prompt a reversal of the equity rally,” UBS Group AG (SIX:UBSG) chief investment officer for global wealth management Mark Haefele said in a note, which added cyclical and value sectors can climb.
Fed Governor Christopher Waller, the latest official to speak, said he is positive about the economic outlook and that asset tapering could begin sooner than expected. Minneapolis Fed President Neel Kashkari also said that he expects a strong job market in the fall, but warned that COVID-19 and its Delta variant remained a threat to global recovery.
The debate has even extended to the U.S. Senate, with senator Joe Manchin urging Fed Chairman Jerome Powell to begin asset tapering as the U.S. economy is at risk of overheating and saddling Americans with “unavoidable inflation taxes.”
The spread of the COVID-19 Delta strain continues to hamper the global economic recovery, with companies including Amazon.com Inc (NASDAQ:AMZN)., BlackRock Inc (NYSE:BLK). and Wells Fargo (NYSE:WFC) & Co. delaying plans for their employees to return to the office. The market also continues to monitor the latest outbreaks in both China and the U.S.
In cryptocurrencies, Bitcoin climbed back above $40,000 while Ether maintained its own rally after announcing a software upgrade that quickens the pace at which tokens are minted.