By Gina Lee
Investing.com – Asian stocks were mostly up on Friday morning, with markets remaining stubbornly upbeat despite the U.S. Federal Reserve setting new capital rules for banks and the ever-rising number of COVID-19 cases capping gains.
The Fed said on Thursday that it would impose a cap on bank dividend payments as well as halting share repurchases until the end of 2020. The limits were imposed after the central bank’s latest stress tests on the sector showed significant capital losses for lenders when tested against the economic impact of COVID-19.
Some investors were positive about the Fed’s latest directive.
“Futures are pointing to gains, it’s just a question of how they interpret the latest directive from the U.S. Federal Reserve…we could see a flow-on effect of regulators stepping in and making sure banks maintain financial health now that we see the pandemic take on different qualities, with the challenges drawn out over a long period of time,” Tom Piotrowski, CommSec markets analyst, told Reuters.
But other investors held a more negative view.
“The Fed “is going to support this market one way or the other…[still,] I think there are going to be a few more dips to come. It’s amazing, the market doesn’t care about fundamentals or earnings at this point, they care about the pandemic and the pandemic only,” Sandy Villere, portfolio manager at Villere & Co., told Bloomberg.
Investors were also monitoring a surge of COVID-19 cases in some U.S. states, with Texas announcing a delay to its re-opening. The total number of global cases was almost at 9.6 million as of June 26 according to Johns Hopkins University data.
Hong Kong’s Hang Seng Index was down by 0.43% by 11:29 PM ET (4:29 AM GMT). The U.S. Senate passed a measure sanctioning Chinese companies involved with the enaction of national security laws in Hong Kong and Macau. Meanwhile, the National People’s Standing Committee is due to convene over the weekend, with the laws expected to be enacted before the end of the month.
Chinese markets were closed for a holiday.
Asian Stock Up, But Worries Remain Over New Fed Restrictions and COVID-19 Surge
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