Asian stock markets fall, COVID variants continue to spread by Investing.com

Gina Lee

Investing.com – As concerns about the spread of variants of COVID-19 continue to intensify, Asia-Pacific stock markets fell in early trading on Friday.

As of 10:14 p.m. Eastern Time (2:14 a.m. GMT), the Chinese stock market has fallen slightly by 0.05% and down by 1.14%. Data released earlier in the day showed that the Consumer Price Index (CPI) in June rose 1.1% lower than expected, and contracted 0.4% higher than expected.

This was a year-on-year increase of 8.8%, slightly lower than the 9% in May.

The Hong Kong stock market fell 0.28%.

The Japanese stock market fell 1.83%. The increasing number of COVID-19 cases prompted the government to declare a new state of emergency in Tokyo less than three weeks before the opening of the Tokyo Olympics.

As the record number of COVID-19 cases also promoted neighboring Seoul, South Korea, to level 4, it fell by 1.90%. These measures will take effect on July 12 and will last for two weeks.

In Australia, it was down by 1.24%.

US government bonds have mostly kept rising in the past week. However, the 30-year U.S. Treasury bond yield fell below 1.90% for the first time since February 2021.

Inflation expectations fell further, and investors digested Chinese data.

“Reinflation requires not only sustained economic growth, but also fiscal factors. We see how difficult it is to achieve some fiscal stimulus,” Road Fu Street Company (NYSE code:). Marvin Loh, global macro strategist, told Bloomberg.

“Monetary policy continues to drive a lot of excessive growth, and we know what this story looks like, that is, lower yields,” he added.

Due to growing concerns about the slowdown in the recovery of the global economy from COVID-19, the central bank’s stimulus measures continue to attract investors’ attention. Although it was announced earlier this week that measures are being taken to prepare for asset reduction, its European counterparts seem to have taken the opposite approach.

The results of an 18-month review were announced on Thursday, in which the central bank raised the inflation target to 2% and stated that a moderate overshoot can be tolerated. The finance ministers and central bank governors of the Group of 20 (G20) nations will meet in Venice later in the day.

Earlier this week, the State Council announced that the People’s Bank of China may unexpectedly lower the bank deposit reserve ratio, and investors are still paying attention to China. In addition to weaker-than-expected data released earlier this month, there are signs that the economic recovery of the world’s second largest economy is also slowing.

In terms of COVID-19, Pfizer Inc. (NYSE:) will request FDA emergency use authorization for the third booster dose of the COVID-19 vaccine co-developed with BioNTech SE (F:). The two companies believe that the enhanced injection will provide protection against the Delta variant of the virus.