Yahoo Finance Asian Equities Edge Higher After Powell Testimony; Japan, EU Sign Trade Agreement
Investing.com – Asian equities traded slightly higher in morning trade on Wednesday following upbeat remarks from Federal Reserve Chairman Jerome Powell during his congressional testimony.
Overnight, The Dow rose 55.53 points to 25,119.89, with Johnson & Johnson (NYSE:JNJ) outperforming after the company reported better-than-expected earnings and revenues. The S&P 500 gained 0.4% to close at 2,809.55, led by gains in tech and consumer staples, while the Nasdaq hit a record high as Netflix (NASDAQ:NFLX) and tech stocks rebounded.
“The ability of Netflix to bounce off its opening lows, and Amazon (NASDAQ:AMZN) to do the same, has given investor’s confidence that the big momentum stocks are not suddenly going to fall out of bed,” said Matt Maley, equity strategist at Miller Tabak + Co. “The other thing is Chairman Powell did not say anything that was overly hawkish in his opening statement."
Powell presented a positive assessment of the U.S. economy during his semi-annual congressional testimony on Tuesday, and said the central bank is on track to gradually raise interest rate.
He also noted that protectionism could potentially hinder economic growth.
“In general, countries that have remained open to trade, that haven’t erected barriers including tariffs, have grown faster. They’ve had higher incomes, higher productivity,” he said.
The Fed chairman also said trade concerns “may well” have an impact on wages and capital expenditures. “We don’t see it in the numbers yet, but we’ve heard a rising chorus of concern which now begins to speak of actual capex plans being put on ice for the time being,” he said.
In Asia, China’s Shanghai Composite edged up 0.2%, while the Shenzhen Component slipped 0.1%. Hong Kong’s Hang Seng Index also rose 0.2%.
Markets now shift their focus to how the government would react to mitigate the effects of the recent trade dispute with the U.S., after data released Monday showed that output in the second quarter slowed and factory activity cooled more than expected.
Elsewhere, Japan and the European Union signed a trade agreement on Tuesday that would allow more movement of goods and services between the two economies as they seek countermeasures against U.S.’s protectionism. The Economic Partnership Agreement would help Japanese car exports and making it easier for European farmers to sell their produce in the Asian nation. The Nikkei 225 gained 1.0% following the news.
Elsewhere, South Korea’s KOSPI added 0.3%. Index heavyweight Samsung Electronics (KS:005930) rose 2.3% and SK Hynix jumped 2.1%.
Down under, Australia’s S&P/ASX 200 rose 0.8%.
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