Asian Stocks Down, Follows Rout in U.S. Shares as Valuations Concerns Continue By

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By Gina Lee – Asia Pacific stocks were down on Thursday morning, extending their decline from the previous week’s record highs as concerns about valuations added to disappointing earnings from companies like Tesla (NASDAQ:), Starbucks (NASDAQ: NASDAQ:) and Boeing (NYSA: NYSE:).

Japan’s was down 1.21% by 10:17 PM ET (3:17 AM GMT) and South Korea’s was down 1.41%. In Australia, the fell 2.10%.

Hong Kong’s (HK:) fell 2.23%.

China’s was up 1.51% while the slumped 2.36%.

The turmoil that brewed after GameStop Corp (NYSE:). and AMC Entertainment (NYSE:) Holdings Inc. shares declined sharply after the close of the previous session continued in Asia on Thursday. In response, .

U.S. shares tumbled, with slumping the most since October.

Meanwhile, the U.S. Federal Reserve kept its policy decision unchanged, and indicated continuous massive support for the U.S. economy, after wrapping up its first policy meeting of 2021 on Wednesday. However, Fed Chairman Jerome Powell warned that the economy still faces a long road towards full recovery from the impact of COVID-19, and that the recovery is still short of inflation and job goals. He added that “the whole focus on exit is premature.”

“The focus is firmly on the fiscal side of the equation now,” BlackRock (NYSE:) chief investment officer of global fixed income Rick Rieder said in a note.

Stimulus checks and extended unemployment insurance have been important to the U.S. recovery and are “far more targeted and effective in combating a crisis … than ‘blunt’ monetary policy tools,” the note added.

Treasuries steadied, with 10-year yields trading just over 1%. Some investors remained positive, however.

“Markets were vulnerable to a setback given some of the positioning and sentiment data that we monitor but we still believe we’re going into a strong economic and profit recovery … that’s going to drive markets higher from this setback,” Goldman Sachs Group Inc (NYSE:) chief global equity strategist Peter Oppenheimer told Bloomberg.

The U.S. releases a slew of data, including fourth-quarter GDP, initial jobless claims and new home sales, later in the day. Data on personal income, spending and pending home sales will be released on Friday.

On the COVID-19 front, the U.K. announced new regulations to curb the spread of the virus while Germany cut its 2021 economic growth forecast. The European Union has so far failed to resolve a vaccine supply dispute with AstraZeneca (NASDAQ:) Plc, raising the risk of additional delays to its already sluggish inoculation campaign.

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