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Asian Stocks Up, but Road to Recovery Remains “Long”

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By Gina Lee

Investing.com – Asia Pacific stocks were mostly up on Friday morning, as investors digested the latest European Central Bank (ECB) policy decision. Ongoing efforts to support the economic recovery from COVID-19 were also in focus as the week draws to a close.

Japan’s Nikkei 225 rose 1.05% by 10:01 PM ET (2:01 AM GMT) and South Korea’s KOSPI was up 0.29%.

In Australia, the ASX 200 was up 0.32% and Hong Kong’s Hang Seng Index jumped 1.50%.

China’s Shanghai Composite gained 0.57% while the Shenzhen Component edged down 0.15%. The Nasdaq Golden Dragon China Index took a tumble after Chinese technology companies in Asia saw their shares slide. Investors now await the next step in China’s regulatory tightening on a slew of private industries, as well as the next move to maintain the country’s economic recovery from COVID-19.

China also tapped its crude reserves in a move to cool down soaring energy costs, which contributed to oil’s move downwards.

Meanwhile, the ECB handed down its policy decision on Thursday. The central bank kept its interest rate unchanged at 0% but indicated it would slow the pace of purchases under its Pandemic Emergency Purchase Program in the fourth quarter of 2021.

However, ECB President Christine Lagarde assured markets that “the lady isn’t tapering”, with COVID-19 still posing a risk to economic recovery.

Some investors agreed with the ECB’s stance.

“Ultimately, the path back to a more normal economic environment is likely going to be long, and we can expect setbacks along the way. The recent slowdown could lead to further volatility in the months ahead,” Commonwealth Financial Network chief investment officer Brad McMillan said in a note.

Across the Atlantic, U.S. President Joe Biden is yet to announce whether he will re-nominate U.S. Federal Reserve Chairman Jerome Powell to a second term.

On the data front, data released on Thursday showed that Americans filed a total of 310,000 initial jobless claims throughout the week. The number was lower than both the 335,000 number in forecasts prepared by Investing.com and the 345,000 claims submitted during the previous week.

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