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Investing.com – Asian stocks were mostly down on Thursday morning, with mounting tensions between the U.S. and China overshadowing the rally in U.S. markets during the previous session.
Tensions between the two countries flared up after China fired four medium-range ballistic missiles into the disputed South China sea on Wednesday, part of broader military exercises being conducted by the People’s Liberation Army. In a separate move on the same day, the U.S. slapped sanctions on a further 24 companies to penalize their efforts to help China “reclaim and militarize disputed outposts” in the waterway.
China called for direct talks to iron out the disputes, with China Securities Regulatory Commission vice chairman Fang Xinghai reportedly requesting an online or phone meeting with U.S. officials. The U.S. is yet to respond to Fang’s request.
China’s Shanghai Composite edged up 0.12% by 10:46 PM ET (3:46 AM GMT) while the Shenzhen Component was down 0.51%.
The National Bureau of Statistics said earlier in the day that profits at Chinese industrial firms grew 19.6% year-on-year in July. Profits grew 11.50% year-on-year in June.
Hong Kong’s Hang Seng Index fell 0.88% and Japan’s Nikkei 225 was down 0.44%.
South Korea’s KOSPI fell 0.59%, with the country reporting a record 441 COVID-19 cases on Wednesday. The Bank of Korea also slashed its growth forecast to 1.3% from the 0.2% contraction that it forecast in May, as well as holding its seven-day repurchase rate at 0.5%, a record low.
Down Under, the ASX 200 was up 0.46%.
Meanwhile, all eyes are on U.S. Federal Reserve Chairman Jerome Powell, who is due to speak at the Jackson Hole symposium later in the day.
Investors are hoping that Powell’s speech will provide clearer guidance on the U.S. economic recovery from COVID-19.
“Markets are now turning bullishly focused on U.S. Fed Chair Powell’s speech at Jackson Hole, which is expected to be a very market-friendly delivery,” AxiCorp chief global markets strategist Stephen Innes told Bloomberg.
“After all, I do not think anyone is willing to bet against the Fed finding a way to sound overtly dovish, especially during this pandemic induced easing cycle.”
