AFP, Hong Kong :
Asian shares struggled to find clear direction on Friday 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 $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.
President Joe Biden also called for an increase in corporate taxes to finance his $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 one percent by the Thursday close.
It also sent jitters through digital currency markets, with Bitcoin dipping below $50,000 in Friday morning trade just days after clocking a record high above $63,000.
But “past instances of tax-related selling around capital gains tax hikes suggest any equity weakness is likely to be short-lived,” said Stephen Innes of Axi.
“The biggest problem might be a near-term liquidity drain as active traders and hedge funds pull back on a high-frequency activity to reevaluate strategy. But this should be a temporary speed bump.”
Tokyo led losses with the Nikkei down 0.7 percent by lunch. Sydney and Singapore also saw modest losses.
But Hong Kong saw gains of 0.8 percent in morning trade and was on track to finish higher for the week.
Shanghai was up 0.4 percent while Seoul and Taipei also posted gains.
Oil benchmarks saw a slight rise after a two-day slump, though Innes warned signs of a diplomatic rapprochement between the US and Iran was putting downward pressure on prices, with expectations growing that Washington could ease sanctions on Tehran.
The snowballing Covid-19 outbreak in India was also hurting fuel demand, he added.
