Asia markets up as Omicron fears ease

  • In Business
  • 2021-12-07 02:46:20Z
  • By AFP

Asian stocks opened higher on Tuesday as investors took heart from strong rebounds on Wall Street on hopes that the newest coronavirus variant will prove less dangerous than previously feared.

The Omicron variant has been detected across the globe but no deaths have yet been reported, with authorities worldwide racing to determine how contagious it is and how effective existing vaccines are.

Top US pandemic adviser Anthony Fauci said over the weekend that while more information was needed, preliminary data on the variant's severity was "a bit encouraging".

Hong Kong's Hang Seng Index was sharply up at the open, while Shanghai was slightly higher.

In Japan, the benchmark Nikkei 225 index gained 1.25 percent in early trade.

"Japanese shares are seen gaining, as US stocks rallied, led by sectors which are sensitive to business cycles after strong concerns about the Omicron variant receded," Okasan Online Securities said in a note.

"The economic data looks very good," Sylvia Jablonski, Defiance ETFs chief investment officer & co-founder, told Bloomberg Television, noting that even long-term worries about the US Federal Reserve ending its ultra-loose monetary policy were not weighing on sentiment for the time being.

"We don't need the same sort of monetary stimulus that we had before so maybe the tapering isn't so bad -- we don't expect it to be too out of control or too quick so there is some good news for buying on the dip," she said.

Singapore, Jakarta, Wellington and Seoul were all slightly up, while stocks in Bangkok and Manila dipped slightly.

On Monday, European and US equities had rebounded on the Omicron news.

London's blue-chip FTSE 100 index rose 1.5 percent, with similar gains recorded in Frankfurt and Paris.

Wall Street also had a strong day, with the Dow up 1.9 percent.

"It's been a positive start to the week for the FTSE 100, and European markets more generally, as concerns over the Omicron variant continue to diminish on further evidence of mild symptoms and so far no deaths reported because of getting the virus," said CMC Markets analyst Michael Hewson.

In China, however, the spectre of potential debt defaults by major property developers loomed.

Sunshine 100 China Holdings said it had missed a repayment deadline, adding to deep concerns over the property market that have been stoked by massive debt at Evergrande Group, as well as worries for Kaisa Group.

In response to the crisis, China's central bank said Monday it would cut the reserve requirement ratio by 0.5 percentage points for most banks, effective December 15.

The move reduces the amount of cash the banks must hold in reserve, which will allow 1.2 trillion yuan ($188 billion) to be injected into the economy over the long term, the central bank said in a statement.

China's real estate industry -- a key growth driver in the world's second-largest economy -- has cooled in recent months after Beijing tightened home-buying rules and launched a regulatory assault on speculation.

- Key figures around 0210 GMT -

Tokyo - Nikkei 225: UP 1.27 percent at 28,282.01 (break)

Hong Kong - Hang Seng Index: UP 1.31 percent at 23,655.39

Shanghai - Composite: UP 0.42 percent at 3,604.312

New York - Dow: UP 1.9 percent at 35,227.03 (close)

London - FTSE 100: UP 1.5 percent at 7,232.28 (close)

West Texas Intermediate: UP 1.04 percent at $70.21 per barrel

Brent North Sea crude: UP 0.79 percent at $73.66 per barrel

Euro/dollar: DOWN at $1.1284 from $1.1288

Dollar/yen: UP at 113.53 yen from 113.03 yen

Pound/dollar: UP at 1.3265 from 1.3237

Euro/pound: DOWN at 85.07 from 85.30 pence



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