Asian Shares Mixed In Cautious Trade

Asian stocks were mixed in cautious trade on Friday after the World Health Organization warned of a possible uptick in hospitalizations and mortality rates in Europe during the winter.

Underlying sentiment remained supported somewhat after the U.S. Federal Reserve indicated it will leave interest rates at near-zero levels for the foreseeable future even if there is an acceleration in the pace of inflation.

Chinese shares eked out modest gains amid signs that global trade is slowly gathering momentum. Refinitiv data showed earlier this week that Chinese firms are set to see a net income profit growth of 6 percent this year, compared with an average 20 percent decline in global companies’ earnings.

The benchmark Shanghai Composite index rose half a percent to 3,365, while Hong Kong’s Hang Seng index was up about 1 percent.

Japanese stocks gained ground, with the Nikkei average rising 0.4 percent to 23,292, led by financials. Sumitomo Mitsui Financial, T&D Holdings and Dai-ichi Life Holdings climbed 3-6 percent after 10-year U.S. bond yields hit a 3-1/2-month high in reaction to the Fed’s new monetary policy strategy.

Railway operators were also moving up, with Central Japan Railway and East Japan Railway rising over 4 percent.

Australian markets were moving lower as soft commodity prices pulled down miners. Healthcare stocks also sagged after recent gains. The benchmark S&P/ASX 200 was down about half a percent.

South Korea’s Kospi average rose more than 1 percent in reaction to the Fed’s dovish message, while New Zealand shares were marginally lower.

The U.S. dollar edged up and gold steadied as longer-term U.S. Treasury yields climbed to their highest levels in months in reaction to the Fed’s new monetary policy strategy.

Oil prices eased after Hurricane Laura roared through Louisiana and Texas without causing any apparent major damage.

U.S. stocks fluctuated before closing mostly higher overnight as Fed Chair Jerome Powell announced a major policy shift to “average inflation targeting”, meaning the Fed is willing to allow inflation to run higher than the standard 2 percent target before hiking interest rates.

The Fed also adjusted its view of full employment to allow labor-market gains to reach more workers.

The S&P 500 edged up 0.2 percent to a fresh record closing high and the Dow Jones Industrial Average rose 0.6 percent to end at its best closing level in over six months, while the tech-heavy Nasdaq Composite shed 0.3 percent.

European markets drifted lower on Thursday as concerns over rising U.S.-China tensions and lingering coronavirus worries overshadowed the aggressive growth strategy from the Federal Reserve.

The pan European Stoxx 600 declined 0.6 percent. The German DAX dropped 0.7 percent, France’s CAC 40 index slid 0.6 percent and the U.K.’s FTSE 100 gave up 0.8 percent.

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