Asian markets lower on growth, virus concerns


HONG KONG (AFP): Asian markets edged lower on Friday (July 16) as investors weighed concerns over economic growth and virus outbreaks and risk aversion set in following dovish comments from the Federal Reserve chief.

Fed Chair Jay Powell reiterated the central bank's plan to maintain stimulus initiatives until the economy fully recovers while Treasury Secretary Janet Yellen warned that inflation would remain elevated for months to come.

"I think we will have several more months of rapid inflation, so I'm not saying that this is a one-month phenomenon," Yellen said during an interview on CNBC after US markets closed.

However she predicted price increases would reach "normal levels" over the medium term.

Wall Street ended mixed, with the Dow closing marginally higher while the other two major indexes retreated.

"US stocks tumbled after a second day of Fed Chair Powell's dovish testimony didn't provide any fresh catalysts to buy risky assets," said OANDA's Edward Moya.

"Risk aversion is firmly in place, possibly because the earnings bar may have been set too high for the banks and because the reopening trade can't get its groove back. It didn't help having China's economic growth reading overnight come in below expectations," Moya added.

Asian stocks were mostly lower, with Tokyo down 1.1 per cent with investors cautious over expanding virus infections and as the Bank of Japan trimmed its GDP growth forecast for the current fiscal year.

Hong Kong was down 0.2 per cent ahead of an expected advisory by US President Joe Biden later Friday warning firms over doing business in the southern Chinese city as Beijing tightens its grip.

"The situation in Hong Kong is deteriorating. And the Chinese government is not keeping its commitment that it made how it would deal with Hong Kong," Biden said Thursday at a press conference with German Chancellor Angela Merkel.

Shanghai was off 0.2 per cent while Sydney, Seoul and Taipei also retreated. Wellington was flat while Singapore, Bangkok and Jakarta ticked higher.

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