Asian Shares End Mixed As Inflation Fears Ease

Asian stocks turned in a mixed performance on Friday, as concerns about resurging new COVID-19 cases and rising tensions between China and the U.S offset investor optimism over a combination of soothing comments on inflation from Fed Chair Jerome Powell and U.S. Treasury Secretary Yellen.

Chinese shares fell after reports the U.S. is due to issue an advisory cautioning its companies about the risks of doing business in Hong Kong. The benchmark Shanghai Composite index dropped 25.29 points, or 0.71 percent, to 3,539.30 while Hong Kong’s Hang Seng index finished marginally higher at 28,004.68.

Australian markets ended a choppy session slightly higher as the nation’s two biggest cities live under strict lockdown rules.

The benchmark S&P/ASX 200 edged up 12.20 points, or 0.17 percent, to 7,348.10 while the broader All Ordinaries index ended up 14.10 points, or 0.19 percent, at 7,630.70.

Miners ended mixed, with Rio Tinto declining 0.4 percent after releasing its second-quarter production results.

Buy now, pay later firm Afterpay dropped 1.3 percent while Zip Co shares rallied 2.8 percent. Energy stocks saw modest losses as oil steadied after two days of losses.

Whitehaven Coal jumped 4.4 percent after it narrowly beat full-year coal production forecast. Drug maker CSL gained 0.9 percent as the Aussie dollar tracked for a weekly loss.

Seoul stocks ended lower amid worries about rising inflation in the U.S. and the spreading new coronavirus pandemic at home, with health authorities warning that new infections are likely to increase during the summer vacation season. The benchmark Kospi slipped 9.31 points, or 0.28 percent, to 3,276.91.

Market bellwether Samsung Electronics dropped 1 percent and No. 2 chipmaker SK Hynix lost 1.6 percent, while pharmaceutical firm Samsung Biologics jumped 2.9 percent.

Japanese shares ended lower for the third day running as the Bank of Japan maintained its monetary stimulus unchanged but lowered its near-term growth outlook citing the impact of the coronavirus pandemic.

The central bank also raised its fiscal 2021 inflation forecast as virus infections climb just days before the Olympic Games begin.

The Tokyo metropolitan government reported 1308 new infections on Thursday, the highest figure since mid-January.

The Nikkei average fell 276.01 points, or 0.98 percent, to 28,003.08 while the broader Topix index closed 0.38 percent lower at 1,932.19.

Market heavyweight SoftBank Group shed 0.7 percent while Uniqlo operator Fast Retailing tumbled 2.6 percent. Tech stocks such as Advantest, Tokyo Electron and Screen Holdings ended down between 1.4 percent and 2.2 percent.

New Zealand shares swung between gains and losses before ending on a flat note after a red-hot inflation reading and upbeat manufacturing data fueled speculation that the central bank may tighten policy as early as August.

U.S. stocks ended mixed overnight as Fed Chair Jerome Powell reiterated expectations for inflation pressures to fade and data showed weekly jobless claims fell to a pandemic-era low.

U.S. industrial production rose in June but manufacturing output continued to be hindered by supply shortages, separate reports revealed.

The tech-heavy Nasdaq Composite fell 0.7 percent and the S&P 500 shed 0.3 percent, while the Dow edged up 0.2 percent after UnitedHealth reported better than expected second quarterly results.