Asia stocks weakened following broad-based declines in U.S. benchmarks as investors mulled a proposal for higher taxes on the wealthy to help pay for U.S. President Joe Biden’s social plan.
Indices opened lower in Japan, South Korea and Australia. U.S. contracts edged up after the steepest decline in five weeks for the S&P 500 Index. India’s SGX Nifty 50 Index futures for April delivery fell 0.5% to 14,336.50, while MSCI Asia Pacific Index little changed.
Speculation arose that traders may sell shares preemptively as Bloomberg News reported the Biden administration is considering raising the tax on capital gains to 39.6% for those earning more than $1 million a year.
Treasury yields and the dollar were steady in Asia’s morning. Markets are also whipsawing on worsening news about the spread of Covid-19 in parts of the world and a mixed batch of earnings reports.
Markets were little moved overnight by a further assurance from European Central Bank President Christine Lagarde that the institution isn’t discussing any pullback in its emergency bond-buying program even as economic data improve.
The U.S. releases new home sales data later on Friday.