Asian Stocks Up on Back of Fed's Pledge of Continuous Support

This post was originally published on this site – Asian stocks were mostly up on Thursday morning in Asia, with the U.S. Federal Reserve avoiding surprises as it concluded its two-day meeting on Wednesday.

Interest rates continue to hover near zero, and Fed Chairman Jerome Powell vowed to use all available tools to support the recovery from the most severe economic downturn “in our lifetime” at a virtual press conference on Wednesday.

“The Fed’s large, looming presence and ability to act more if needed has provided a backstop for risk assets over the near term,” Jason Pride, Glenmede chief investment officer, told Bloomberg.

“The focus now shifts to the Federal Open Market Committee’s September meeting, when investors might expect more action,” he added.

A far more pressing question for investors is whether Republicans and Democrats can reach a consensus on the latest stimulus measures before the expiry of some existing measures on Friday.

“If Congress does that to the satisfaction of the market, they’ll just drag the rest of the global markets higher with them,” CommSec market analyst Tom Piotrowski told Reuters.

But with U.S. President Donald Trump saying on Wednesday that his administration and Democrats in Congress were still “far apart” on the measures, and other Republicans opposed to the $1 trillion worth of measures proposed by their own party, investors will be keeping an eye on the progress the two parties make before the expiry date.

Down Under, the ASX 200 rose 0.93% by 11:04 PM ET (4:04 AM GMT). Australia saw its highest number of daily COVID-19 cases, with 723 new cases reported on Thursday. The record number could see the current lockdown measures extended to curb the spread of the virus.

Japan’s Nikkei 225 was down 0.02% and South Korea’s KOSPI gained 0.27%.

Hong Kong’s Hang Seng Index was up by 0.73%. The city’s said on Wednesday that gross domestic product shrunk by 9% in the second quarter.

China’s Shanghai Composite was up 0.07% while the Shenzhen Component was down 0.48%.

Meanwhile, COVID-19 case numbers continue a relentless upward climb. There are almost 17.7 million cases globally as of July 30, according to Johns Hopkins University data.

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