· Asia shares pause for breath, lot riding on Fed
Asian shares touched two-year peaks on Thursday in the wake of Wall Street’s record run as cheap cash drove up big-cap tech darlings, although Sino-U.S. tensions caused caution to creep in as the session progressed.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS had edged up 0.1% after earlier reaching its highest since August 2018.
Asian investors turned more circumspect because of the military face-off in the South China Sea, as Washington blacklisted 24 Chinese companies while Beijing reportedly test fired missiles into the area on Wednesday.
Yet markets globally are still focused on the endless liquidity being pumped out by central banks.
Federal Reserve Chair Jerome Powell is expected to outline a more flexible approach to policy on Thursday including a shift to targeting an average inflation rate around 2% that will allow rates to stay super-low for longer.
· Japan shares end lower on U.S.-China worries, Fed chief's speech eyed
Japanese shares closed lower on Thursday, with consumer discretionary and telecommunications stocks leading the declines, as investors were worried about U.S.-China relations and awaited a speech by U.S. Federal Reserve chairman.
The Nikkei 225 Index ended down 0.35% at 23,208.86, while the broader Topix index fell 0.53% to 1,615.89.
The United States blacklisted 24 Chinese firms and targeted individuals it said were part of construction and military actions in the South China Sea, while a U.S. defence official said China had launched four ballistic missiles into the sea.
Meanwhile, Fed Chairman Jerome Powell will address the Fed’s annual central bankers’ conference later in the day, usually held in Jackson Hole, but being conducted virtually this year because of the COVID-19 pandemic.
· China shares end higher on industrial profits, tech rebound
China shares closed higher on Thursday, lifted by new data showing industrial profits rose in July, and as tech firms resumed a rally sparked by reforms to the country’s tech-heavy ChiNext board.
At the close, the Shanghai Composite index was up 0.61% at 3,350.11. The blue-chip CSI300 index was up 0.54%.
The smaller Shenzhen index closed 1.04% higher on Thursday
· European markets open flat ahead of speech by Fed’s Powell
European markets opened flat Thursday, losing recent positive momentum as investors focus on the forthcoming speech by the Federal Reserve’s Chairman Jerome Powell.
The pan-European Stoxx 600 index opened 0.01% percent higher before dipping into negative territory.
Global investors are looking ahead to the upcoming speech stateside from the Fed’s Powell, where he is expected to introduce a new pandemic-era tool to combat the economic impact of Covid-19 and foster inflation in the U.S. The Fed has had a 2% inflation target, but in the decade since the last financial crisis it has more often than not seen inflation fall below its target. Powell will speak during a virtual version of the Fed’s annual Jackson Hole, Wyoming, conference.
Reference: CNBC, Reuters
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