By Gina Lee
Investing.com – Asia Pacific stocks were mostly down on Friday morning, as ongoing concerns about the economic recovery from COVID-19 ended the week on a sour note.
Japan’s slid 1.13% by 10:21 PM ET (2:21 AM GMT), with the handing down its policy decision later in the day.
South Korea’s was down 0.53% and in Australia, the was down 0.22%.
Hong Kong’s fell 0.83%. The U.S. is due to issue an advisory cautioning its companies about the risks of doing business in the city, a move that could escalate tensions between the U.S. and China.
China’s edged down 0.19% and the was down 0.29%.
U.S. counterparts also fell, with declines in growth favorite stocks in the energy and technology sector such as Amazon.com Inc (NASDAQ:). dragging Wall Street lower. However, vaccine producer Moderna Inc. (NASDAQ:) saw its shares rally in extended trading after .
The benchmark is set for a third weekly retreat and on the data front, the 360,000 were filed for the week.
U.S. Federal Reserve Chair Jerome Powell wrapped up his second day of testimony before the House of Representatives Financial Services Committee on Thursday. There, he continued to hold his view that uncomfortably high inflation would be temporary, although he has said the U.S. economic recovery is far from over, with the Fed closing watching inflation before it begins asset tapering.
U.S. Treasury Secretary Janet Yellen reiterated Powell’s views, saying she expects “several more months of rapid inflation,” adding that expectations for price gains still look well contained.
However, others raised concerns that higher inflation will hurt the economic outlook, with some of Powell’s colleagues even arguing that the time has come to scale back emergency policy settings. St. Louis Fed President James Bullard urged a move forward in reducing stimulus, arguing the goal of achieving “substantial further progress” on both inflation and employment has been met.
Global stocks continued to remain near record levels, but the Fed’s eventual asset tapering, ongoing COVID-19 outbreaks involving the Delta variant, indications of a peaking economic recovery and slowing corporate earnings momentum all remain as risks.
However, some investors remained optimistic that the growth cycle is not over yet.
“It’s possible that we’ve reached peak growth, but that doesn’t necessarily mean the cycle is rolling over,” J O Hambro Capital Management senior fund manager Giorgio Caputo told Bloomberg.
“When you factor in those peak growth concerns, as well as what’s been going on with the Delta variant of COVID-19 and the way interest rates have been declining, it does seem like we’re having a little bit of a growth scare,” he added.
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