Asian markets fluctuate as traders weigh recovery against Delta

HONG KONG: Asian markets were mixed Wednesday as investors tried to assess whether the global recovery will be resilient enough to withstand the fast-spreading Delta Covid variant, with optimism being tested by the stuttering rollout of vaccines and a spike in infections in some countries.

China's drive to tighten its grip on the world's number two economy with a swathe of new regulations for private enterprises is also weighing on sentiment, while there are also concerns that valuations may have run too hot as several markets sit at record or multi-year highs.

Asian markets drop as upbeat Fed gives way to Delta, China

Federal Reserve boss Jerome Powell's indication Friday that the central bank will take it easy in winding back its ultra-loose monetary policy -- and even more cautious in hiking interest rates -- has helped fuel a healthy run-up this week.

But Wall Street finished Tuesday on a tepid note after a closely watched survey showed US consumer confidence saw a sharp drop in August to its lowest level in six months owing to concerns about Delta and surging prices.

"A combination of higher prices -- still much in evidence across a swathe of incoming US data -- and doubtless too the resurgence in Delta-strain Covid-19 infections, and hospitalisations, are taking a toll," said Ray Attrill of National Australia Bank.

"How temporary this will prove to be of course remains to be seen."

While the United States remains largely open thanks to a successful vaccine rollout, other countries that have administered fewer jabs are struggling with fresh waves of Covid and are being forced to impose strict containment measures.

This has tempered hopes that the blockbuster economic recovery seen at the start of the year can be maintained.

In early Asian trade, Tokyo, Singapore, Seoul and Wellington rose but Hong Kong, Shanghai, Sydney, Taipei, Manila and Jakarta were in negative territory.

"Markets are taking a little bit of a breather," Cliff Hodge, of Cornerstone Wealth, said, adding they "are now trying to grapple with: well, what's next?"

Focus is now on the release Friday of US jobs data, which could have a huge bearing on when the Fed decides to start winding down its bond-buying financial support programme.

Oil prices edged up ahead of the monthly meeting of OPEC and other producers who are expected to continue raising output with the global recovery largely still on track.

Industry body the American Petroleum Institute said stockpiles rose more than 2 million barrels last week, according to Bloomberg News, and observers expect the market to wobble over the coming months.

"The market is likely to remain volatile -- we not only have the OPEC meeting, hurricane season is also upon us," Howie Lee, at Oversea-Chinese Banking Corp, said.

"Brent is still expected to trend within $70 to $75 for now, but the near-term volatility means it may overshoot on both ends momentarily in the coming week or two."

Key figures at 0230 GMT

Tokyo - Nikkei 225: UP 1.3 percent at 28,446.81 (break)

Hong Kong - Hang Seng Index: DOWN 0.1 percent at 25,864.43

Shanghai - Composite: DOWN 0.3 percent at 3,531.83

Dollar/yen: UP at 110.20 yen from 110.00 yen at 2040 GMT

Pound/dollar: DOWN at $1.3734 from $1.3751

Euro/pound: UP at 85.93 pence from 85.84 pence

West Texas Intermediate: UP 0.5 percent at $68.82 per barrel

Brent North Sea crude: UP 0.4 percent at $71.94 per barrel

New York - Dow: DOWN 0.1 percent at 35,360.73 (close)

London - FTSE 100: DOWN 0.4 percent at 7,119.70 (close)