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Asian Stock Markets Rise Despite Omicron Threat

An electronic stock quote board is displayed in a conference room in Tokyo, Japan on November 1, 2021. REUTERS / Issei Kato

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HONG KONG, Dec.22 (Reuters) – Asian stock markets gained ground on Wednesday as global investors’ risk appetite rises as year-end approaches, despite growing cases of Omicron variants in the world.

The MSCI’s largest Asia-Pacific stock index outside of Japan (.MIAPJ0000PUS) rose 0.6%, after US stocks ended the previous session with gains.

Australian stocks (.AXJO) were down 0.1%, which analysts said was the result of an overnight higher US dollar that dampened appetite for commodities and related stocks to the sector.

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Japan’s Nikkei stock index (.N225) was up 0.1%.

Hong Kong’s Hang Seng Index (.HSI) jumped 1.2% and China’s blue-chip CSI 300 (.CSI) index rose 0.23% in trade. Tech stocks were the main driver behind Hong Kong’s strong opening after trading in negative territory for most of the week.

A better night on Wall Street provided the positive lead in Asian markets with sentiment rebounding sharply for US stocks.

The Dow Jones Industrial Average (.DJI) gained 560.54 points, or 1.6%, to 35,492.7, the S&P 500 (.SPX) gained 81.21 points, or 1.78%, to 4 649.23 and the Nasdaq Composite (.IXIC) added 360.14 points, or 2.4%, to 15,341.09.

The leap came despite growing concerns about the spread of the Omicron variant as traditional holiday periods approach the world.

The variant, first detected last month, doubles infections in 1.5 to 3 days, according to the World Health Organization.

It is not yet known whether it causes more severe disease than the Delta variant.

However, Asian investors were mostly unaware of the current increase in the number of cases.

“Clients are still happy to buy here despite the obvious market and health risks, most of the time they are adding to their existing positions,” John Milroy, Ord Minnett’s Sydney adviser, told Reuters.

“After two years the customers are tired of talking about it and while acknowledging it they are again focusing on the profits which we think should be really good.”

BOCOM International research director Hong Hao said investors based in China were more focused on potential supply chain issues related to any COVID outbreak on the mainland.

“I would say investors look at the case numbers as long as production capacity in China is not affected,” he told Reuters.

“Investors appear to be more relaxed with new data showing that the Omicron is not as fatal as the other variants… in China the biggest concern remains the real estate industry.”

In Asian trade, the benchmark 10-year Treasury yield was 1.4651% from its US close of 1.487% on Tuesday. The two-year yield, which rises with traders’ expectations for a hike in federal funds rates, reached 0.6665% from a US close of 0.675%.

The dollar appreciated 0.03% against the yen to 114.11. It is still a far cry from its high this year of 115.51 on 2021-11-24.

The dollar index, which tracks the greenback against a basket of currencies from other major trading partners, was down to 96.42.

US crude rose 0.5% to $ 71.47 while Brent crude rose to $ 74.3 per barrel.

Gold was slightly higher, with the spot price trading at $ 1,789.36 an ounce.

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Reporting by Scott Murdoch in Hong Kong; Editing by Stephen Coates

Our standards: Thomson Reuters Trust Principles.

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