Shanghai Composite, Hang Seng and Nikkei: Asia stock exchanges mostly in the red

From Gina Lee

Investing.com – As of Friday morning, the Asia-Pacific region was largely negative but still hovering near their highs. Support was provided by the Federal Reserve’s renewed assurance that the economy would get going again without causing uncontrolled inflation.

China fell 0.77% by 7.04 CET and it slipped 1.10%. The Chinese inflation data for the reporting month of March, however, turned out to be higher than expected. The consumer price index fell by 0.5% compared to the previous month and rose by 0.4% compared to the same month last year, while the producer price index rose by 4.4% year-on-year.

Hong Kong fell 0.84%.

Japan rose 0.60%, while South Korea fell 0.18% and Australia fell 0.11%.

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Fed chairman Jerome signaled during one that the US central bank will by no means cut back its support for the US economy. At the same time, he emphasized that the economic revival could lead to a short-term rise in prices, but that this would only be of a temporary nature and pose no risk of inflation.

While the remarks demonstrated the Fed’s determination to maintain loose monetary policy for the time being, Powell added that the Fed would react if inflation expectations were “persistently and significantly” above tolerable levels.

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Meanwhile, US government bonds were in demand and accordingly reached their lowest level in two weeks. The reason for this was statements by Powell’s colleague, New York Fed Deputy Chairman Lorie Logan, who brought up an increase in purchases of 20-year Treasury bonds by the Fed. The cross-country skiers were able to gain more power afterwards.

The disappointing ones released on Thursday showed that the economic recovery from COVID-19 still has a long way to go. According to the data, the number of claims rose to 744,000. Economists polled by Investing.com had expected 680,000 initial applications after 728,000 initial applications in the previous week.

“The claims for unemployment benefits are signaling to the market that things may not be as positive as people think and that we are still a long way from recovery,” Reuters quoted Inverness Counsel’s chief investment strategist Tim Ghriskey.

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Other investors were more optimistic.

“Many investors are concerned about the stock market, which has hit one high after another, but that doesn’t mean it can’t go further because the economic environment is undoubtedly positive for the stock market,” said Xi Qiao, managing director at UBS (SIX 🙂 Global Wealth Management, opposite Bloomberg.

As of April 9, more than 726 million COVID-19 vaccine doses had been administered worldwide. However, some countries, including China, are reporting supply shortages as part of the vaccination campaign.

The outlook for the US has brightened significantly, but remains threatened by possible setbacks in the global economy, as vaccination programs “have not got off nearly as well in many countries,” said Mary Daly, president of the San Francisco Fed, to Bloomberg.

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