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Asian Stocks Down Over Hawkish Comments Ahead of Jackson Hole

Published 08/26/2021, 09:55 PM
Updated 08/26/2021, 10:02 PM
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By Gina Lee

Investing.com – Asia Pacific stocks were mostly down on Friday morning, with investors digesting hawkish comments from some U.S. Federal Reserve officials ahead of its Jackson Hole symposium and the latest developments in Afghanistan.

Japan’s Nikkei 225 was down 0.48% by 9:53 PM ET (1:53 AM GMT) while South Korea’s KOSPI inched up 0.09%.

In Australia, the ASX 200 edged down 0.11% and Hong Kong’s Hang Seng Index was down 0.33%.

China’s Shanghai Composite fell 1.09% while the Shenzhen Component slid 1.92%. Chinese technology shares slid as earnings disappointed, and the country tightens private industries’ regulations. The Nasdaq Golden Dragon China Index that tracks Chinese shares listed in the U.S. retreated for the first time in five days.

Some Fed officials insisted that asset tapering begin soon ahead of Jackson Hole. Dallas President Robert Kaplan said he favors starting October 2021 or shortly after, St. Louis Fed President James Bullard called for a start in fall 2021 and Kansas City Fed President Esther George urged for an early move to begin in 2021. However, Kaplan, Bullard and George will not vote on policy in 2021.

U.S. Treasury yields edged lower as investors await Fed Chairman Jerome Powell’s symposium speech later in the day. Investors are bracing for some market volatility after his remarks, with several Treasury options expiring on Friday.

Some investors remained cautiously optimistic.

The equity market is likely “underestimating all the known unknowns we’re going to be living with for the next three to six months,” Eaton Vance (NYSE:EV) Management fund manager Yana Barton told Bloomberg.

“You don’t have to make a bet of whether this is a cyclical recovery or a growth recovery, why can’t you do one alongside the other?” she added.

On the data front, U.S. GDP grew 6.6% quarter-on-quarter, and the GDP price index grew 6.2% quarter-on-quarter, in the second quarter. Americans also filed a total of 353,000 initial jobless claims throughout the week.

Further data, including the core personal consumption expenditures (PCE) price index as well as personal income and spending, is due later in the day.

Meanwhile, blasts outside Afghanistan’s Kabul airport raised tensions amid the U.S. evacuation from the country. U.S. President Joe Biden warned the attackers that “we will hunt you down.”

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