Asian markets were mixed Wednesday as investors assess the impact of the fast-spreading Delta variant and the future of Federal Reserve financial support against expectations that the global economy will eventually recover from the pandemic crisis.

News that US President Joe Biden's $1.2 trillion infrastructure spending bill had finally passed the Senate provided some cheer, though analysts said it would likely be some time before it gets through the House owing to differences among Democrats.

Equities have had a largely positive start to the week after a recent run of pressure caused by profit-taking -- many markets were sitting around record or multi-year highs -- and concerns about China's crackdown on sectors including tech and private tuition.

But the key driver of unease has been the surge in new infections of the Delta Covid mutation, which has forced a number of governments around the world to reimpose lockdowns and other containment measures.

While the new case rates are rising in places with struggling vaccination programmes, spikes in countries with high inoculation rates such as Israel, the United States and Britain are also seeing it spread.

Still, investors remain by and large upbeat that the world economy will eventually ride the disease out, even if it does take the recovery longer than initially hoped.

"There's clearly more focus and concern on the Delta variant of Covid, but, to this point, markets have appraised that as a manageable risk," David Donabedian, of CIBC Private Wealth Management, said. "The market is climbing the wall of worry."

Tokyo, Hong Kong, Shanghai, Sydney and Manila rose but Singapore, Seoul, Wellington, Taipei, Mumbai and Bangkok fell.

London, Frankfurt and Paris opened on the front foot.

That came after the Dow and S&P 500 ended at new record highs.

- Biden's House hurdles -

Eyes are firmly on the release later in the day of US July inflation data, which could have a bearing on the Fed's decision on when to start tapering the vast bond-buying programme that has been a major pillar of support for global markets since April last year.

Soaring prices in recent months and blockbuster jobs creation in June and July have ramped up pressure on the bank to tighten policy in order to prevent the economy from overheating.

And with several officials indicating their support for a tightening before year's end, the question now is when -- not if -- it will move, leaving observers to suggest an interest rate hike as early as 2022.

"While the Fed may well still be able to argue the continued rise in prices is transitory... if June's number doesn't mark the high-water mark, then Fed officials may start to shift a little bit more uncomfortably as we head into the autumn," said CMC Markets analyst Michael Hewson.

"However, whatever happens this week the direction of travel towards a taper seems a little more straightforward than it was a couple of months ago, given recent jobs data."

Expectations for a further fresh financial boost from Biden's new infrastructure bill are tepid, despite it enjoying rare bipartisan passage through the Senate on Tuesday.

The programme -- which includes $550 billion in new spending -- must now make its way through the House before being signed off by the president.

But the House has signalled it will not pass unless senators also push through a $3.5 trillion package for social spending that includes tax increases -- a demand Republicans and even some Democrats are unlikely to agree to.

"The big uncertainty is if the partisan budget resolution is chopped down too much, will progressives refuse to hold up all infrastructure legislation," said OANDA's Edward Moya.

- Key figures around 0720 GMT -

Tokyo - Nikkei 225: UP 0.7 percent at 28,707.51 (close)

Hong Kong - Hang Seng Index: UP 0.2 percent at 26,650.28

Shanghai - Composite: UP 0.1 percent at 3,532.62 (close)

London - FTSE 100: UP 0.3 percent at 7,183.55

Dollar/yen: UP at 110.74 yen from 110.58 yen at 2040 GMT

Pound/dollar: DOWN at $1.3823 from $1.3840

Euro/dollar: DOWN at $1.1711 from $1.1722

Euro/pound: UP at 84.70 pence from 84.67 pence

West Texas Intermediate: UP 0.4 percent at $68.59 per barrel

Brent North Sea crude: UP 0.6 percent at $71.02 per barrel

New York - Dow: UP 0.5 percent at 35,264.67 (close)

dan/oho

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Asian markets swing as traders digest Delta, US data
Hong Kong (AFP) Aug 5, 2021
Markets fluctuated in Asia on Thursday following a tepid Wall Street lead as traders contemplated mixed US data, concerns about the fast-spreading Delta variant and indications that the Federal Reserve could begin winding back its ultra-loose monetary policy by the end of the year. The broad view is that the recovery is still on track while the volatility that gripped the world last week has died down for now, though there remains a certain amount of unease about China's next move after embarking on ... read more