By Gina Lee
Investing.com – Asia Pacific stocks were mostly higher Thursday morning as investors took in a slowdown in Chinese services sector expansion alongside comments from the US Federal Reserve.
China was down 0.02% at 10:38 PM ET (2:38 AM GMT) and down 0.31%.
Data released earlier in the day said the May reading was 55.1, lower than the April reading of 56.3 and 55.2 released by the National Statistics Office on Monday.
Tensions between the United States and China were also on investors’ radars, as US President Joe Biden will sign an amended order later this week that bans American investment in a list of companies because of their connection. with China’s defense and surveillance technology sectors.
Japan’s rose 0.35% after data released earlier in the day indicated May’s was 46.5, down from April’s 49.5.
Hong Kong was up 0.11% and South Korea was up 0.80%.
In Australia, it was up 0.45%. The country grew 1.1% month-on-month in April, according to data released earlier in the day.
In the United States, the chairman of the Philadelphia Fed said Wednesday that the Fed should begin discussing the timeline for reducing its bond purchases.
“I think it’s appropriate that we slowly and carefully backtrack on our purchases at the appropriate time … when that’s something we need to start discussing,” he said.
Investors remain concerned about a combination of problems including possible runaway inflation and a gradual reduction in stimulus measures. However, some Fed officials have reiterated that the pressure on prices will be temporary and that lawmakers will continue to support the reopening of companies since COVID-19. BlackRock Inc (NYSE :). CEO Larry Fink said a possible outbreak of inflation could be underestimated.
The central bank also noted in its Beige Book newspaper that companies faced labor shortages and rising costs as US economic growth increased at a “moderate pace” from early April to late May.
Meanwhile, the Fed said Wednesday that it plans to slowly sell a portfolio of corporate debt purchased through an emergency credit line it launched in 2020 when COVID-19 hit financial markets.
“Sales of the portfolio will be gradual and orderly, and will aim to minimize the potential for any adverse impact on the functioning of the market taking into account the day-to-day liquidity and trading conditions of exchange-traded funds and corporate bonds,” he said the Fed.
“It looks like they’re starting to lay the groundwork for phasing out … so I think investors are in a holding pattern right now,” Aaron Clark, portfolio manager at GW&K Investment Management, told Bloomberg.
On the data front, investors are now awaiting US data for May to further assess the economic recovery from COVID-19 and inflation risks.
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