Wednesday, 17th August, 2022
Wednesday, 17th August, 2022

Asia markets up as Omicron fears ease

HONG KONG, Dec 7, 2021 (BSS/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.

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