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Asian Stocks End Week on Down Note Over Economic Data, China Crackdown Impact

Stock Markets Jul 29, 2021 10:21PM ET
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By Gina Lee – Asia Pacific stocks were down on Friday morning, wrapping up a volatile week. Asian stocks steadied while U.S. equity futures retreated as investors digested the latest economic data from the U.S., Japan and Australia. Risks from China’s crackdown on industries including private education at the beginning of the week also remain.

Japan’s Nikkei 225 fell 1.61% by 10:13 PM ET (2:13 AM GMT). Jobs data released earlier in the day said that the jobs/applications ratio for June was higher than expected at 1.13, while the unemployment rate was a lower-than-expected 2.9%. However, retail sales plunged to 0.1% year-on-year in June.

South Korea’s KOSPI fell 1.06%.

In Australia, the ASX 200 inched down 0.08%. The country’s producer price index grew 2.2% year-on-year and 0.7% quarter-on-quarter in the second half of 2021. Private sector credit grew 0.9% month-on-month in June.

Hong Kong’s Hang Seng Index fell 0.87%.

China’s Shanghai Composite fell 0.91% while the Shenzhen Component was down 0.66%.

Nasdaq 100 contracts fell around 1%, with Inc. (NASDAQ:AMZN) shares falling in extended trading as signs emerge that its rapid growth through COVID-19 is slowing down.

“Thursday’s rebound in Chinese equities after the recent regulatory induced sell-off provided a positive lead to the solid performance in risk asset overnight,” National Australia Bank (OTC:NABZY) senior FX strategist Rodrigo Catril told CNBC.

Benchmark Ten-year U.S. Treasury yields slowed down their recent advance. On the data front, the U.S.’s GDP rose 6.5% quarter-on-quarter in the second quarter of 2021, according to data released on Thursday. The growth was solid, but lower than both the 8.5% in forecasts prepared by and the 6.3% growth recorded for the first quarter.

The GDP price index grew a better-than-expected 6.1% quarter-on-quarter in the same period, however.

Meanwhile, the number of initial jobless claims filed over the past week grew to 400,000, higher than the 380,000 claims in forecasts prepared by but lower than the 424,000 claims filed during the previous week.

Global stocks also rounded up a volatile week, with the Chinese clampdown sparking a selloff in Hong Kong and China. However, U.S. Federal Reserve Chairman Jerome Powell’s indication that asset tapering would only begin once the economic recovery from COVID-19 has made sufficient progress, helped underpin broad market sentiment.

Powell’s comments came as the central bank handed down its latest policy decision on Wednesday.

“The disappointing jobless claims numbers put some fire-power behind Powell’s comments, emphasizing that we have a ways to go for the labor market to recover... the miss on GDP only puts a finer point on the fact that growth may be stalling,” E*Trade Financial (NASDAQ:ETFC) managing director of investment strategy Mike Loewengart told Bloomberg.

Robinhood Markets Inc. (NASDAQ:HOOD) made a disappointing debut in New York on Thursday as shares fell 8.4% below their initial public offering price. The company failed to win over some of the retail investors that it was courting for long-term growth.

Asian Stocks End Week on Down Note Over Economic Data, China Crackdown Impact

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