Asian shares on Friday struggled to find clear direction after a week spent seesawing to match the prevailing momentum on Wall Street, where trade faltered overnight after tax hike reports.
Washington is said to be developing a plan to slap new levies on wealthy investors, including a near doubling of the tax on stock transaction profits to 39.6 percent for people earning more than US$1 million.
Any tax plan faces a long process on Capitol Hill before becoming a reality, but analysts said the reports indicate hikes are very much in the mix in Washington.
US President Joe Biden also called for an increase in corporate taxes to finance his US$2 trillion infrastructure package.
The news hit 10-year US Treasury yields and the greenback, while leaving all three main New York stock benchmarks down nearly 1 percent by the Thursday close.
It also sent jitters through digital currency markets, with bitcoin dipping below US$50,000 in Friday morning trade just days after clocking a record above US$63,000.
Yet “past instances of tax-related selling around capital gains tax hikes suggest any equity weakness is likely to be short-lived,” AxiCorp Financial Services Pty chief global markets strategist Stephen Innes said.
“The biggest problem might be a near-term liquidity drain as active traders and hedge funds pull back on a high-frequency activity to re-evaluate strategy, but this should be a temporary speed bump.”
Tokyo led losses, with the Nikkei 225 index down 0.57 percent at 29,020.63, finishing 2.23 percent lower for the week. The TOPIX lost 0.39 percent to 1,914.98, and dropped 2.34 percent from a week earlier.
However, Taiwan’s TAIEX ended up 203.30 points, or 1.19 percent, at the day’s high of 17,300.27, off a low of 17,055.48. Turnover totaled NT$454.263 billion (US$16.16 billion). It rose 0.82 percent from a week earlier.
Australia’s S&P/ASX 200 rose 0.08 percent to 7,060.7, but lost 0.04 percent for the week.
South Korea’s KOSPI increased 0.27 percent to 3,186.10, declining 0.39 percent from a week earlier.
Hong Kong’s Hang Seng gained 1.12 percent to 29,078.75, rising 0.38 percent for the week, while the Shanghai Composite Index was up 0.26 percent for the day and 1.39 percent for the week at 3,474.17.
Additional reporting by staff writer, with CNA
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