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Asian Markets Mixed Amid China Growth Worries and US Debt Ceiling Negotiations

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On Friday, Asian markets were uneven, with China and Hong Kong equities falling due to fears about the world’s second-largest economy’s stalling recovery, while Japan’s Nikkei 225 index lingered at a 33-year high.

South Korea’s KOSPI was up 0.82% at 10:40 am, Japan’s Nikkei was up 0.83%, Australia’s ASX 200 was up 0.6%, while Hong Kong’s Hang Seng index was down 1.24% and China’s Shanghai Composite was down 0.2%. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.09% but was expected to end the week with a gain.

After Alibaba Group Holding Ltd announced a lower-than-expected 2% increase in quarterly sales, China shares slumped 0.61%, while Hong Kong’s Hang Seng index plummeted as much as 1.8%, pulled down by tech firms.

Data released this week showed that China’s economy lost steam at the start of the second quarter, raising concerns about the shaky post-COVID-19 rebound.

However, Japan’s Nikkei continued to rise, reaching its highest level since August 1990, during the country’s so-called bubble phase.

The Nifty 50 Futures, an early indication for the Nifty50, traded 0.2% or 36 points higher at 8:35 am on Friday, signalling a modestly higher opening on Dalal Street.

Investors’ focus has been firmly on the negotiations over the United States debt ceiling, and rising hopes that a compromise can be achieved propelled US stocks higher overnight. Furthermore, initial unemployment claims were lower than expected last week, as investors anticipated debt ceiling talks in Washington.

The major US indices finished strong on Thursday, following Walmart Inc.’s remarkable quarterly performance in the March-ended quarter. The Nasdaq Composite increased by 1.51%, the Dow Jones increased by 0.34%, and the S&P 500 increased by 0.94%.

The focus will now shift to today’s panel discussion on Fed Chair Jerome Powell and previous Chair Ben Bernanke’s Perspectives on Monetary Policy. Markets are now pricing in a 25 basis point increase when the Fed meets next month.

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