Asian markets mixed as investors weigh economic risks posed by
TOKYO — Asian shares were mixed Tuesday as investors continued to cautiously weigh how much damage the new omicron coronavirus variant may unleash on the global economy.
Japan’s benchmark Nikkei 225
NIK,
rose 0.8% in morning trading. Australia’s S&P/ASX 200
XJO,
gained 1.2% while South Korea’s Kospi
180721,
lost 1.2%. Hong Kong’s Hang Seng
HSI,
dipped 1.1%, while the Shanghai Composite
SHCOMP,
added 0.2%. Stocks dipped in Singapore
STI,
and Malaysia
FBMKLCI,
but advanced in Taiwan
Y9999,
and Indonesia
JAKIDX,
Some analysts think a serious economic downturn, like what happened last year, will likely be averted because more people have been vaccinated. But they also think a return to pre-pandemic levels of economic activity has been dramatically delayed, especially in sectors such as tourism. Consumption may also be hurt.
“Sentiments may ride on the positive handover from Wall Street overnight, but with the slower vaccination rate and more limited healthcare capacity in the region, uncertainty from the new omicron variant may seem to bring about higher economic risks for the region at a time where it is shifting towards further reopening,” Yeap Jun Rong, market strategist at IG in Singapore, said of the omicron’s impact on Asia.
The vaccination rollout rate varies by country in the region, at about 77% in Japan, 50% in Vietnam and 35% in Indonesia. In Asia, the omicron variant has only been officially detected in Hong Kong, but the region is bracing for its wider arrival, which generally means a setback for economic reopening. Worries also remain about how effective current vaccines may be against omicron.
On Wall Street, the S&P 500
SPX,
rose 1.3% to recover more than half of its drop from Friday, which was its worst since February. Bond yields and crude oil also recovered chunks of what they lost in traders’ knee-jerk reaction to run toward safety and away from risky investments.
With vaccines in hand — and with the benefit of a weekend to mull whether Friday’s sharp market moves were overdone — analysts said the world may be in a better position to weather this newest potential wave. Plus, Friday’s tumble for markets may have been exacerbated by many traders taking the day off following Thanksgiving.
But while the market steadied itself, uneasiness still hangs over it due to the discovery of the omicron variant. The variant appears to spread more easily, and countries around the world have put up barriers to travel in hopes of stemming it.
“There are still more questions than answers regarding the new variant,” said Ryan Detrick, chief market strategist for LPL…
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