Asian Stocks Up, but Omicron Threat Caps Overall Gains By

Asian Stocks Up, but Omicron Threat Caps Overall Gains
© Reuters.

By Gina Lee – Asia Pacific stocks were mostly up on Tuesday morning, recovering from the previous session’s battering. Although boosted investors sentiment, surging cases of the omicron COVID-19 variant globally kept moves small overall.

Japan’s jumped 2.07% by 10:21 PM ET (3:21 AM GMT) and South Korea’s was up 0.44%.

In Australia, the gained 0.62%. The released the minutes from its latest meeting earlier in the day, where it said that beginning asset tapering at its first meeting of 2022 and ending it in May is consistent with existing forecasts.

Hong Kong’s was up 0.48%.

China’s was up 0.43% while the inched down 0.03%. Authorities are urging large private and state-owned property companies to acquire real estate projects from troubled developers, in order to reduce the risks posed to the economy by the latter’s mounting debt.

However, the mood was somewhat brighter in early Asian trading as their U.S. counterpart clawed back some losses. However, volumes were thin as the holidays approach.

U.S. shares had retreated more than 1% after President Joe Biden’s social spending and climate bill was dealt a big blow. Senator Joe Manchin said on Sunday that he will not support Biden’s Build Back Better package, a $1.75 trillion domestic investment bill.

Goldman Sachs Group Inc. economists cut their U.S. growth forecasts after Manchin’s comments, while the recorded its biggest three-day drop since September 2021.

“There’s kind of two dynamics going on. Probably the most important one is the imminent reduction in liquidity. On top of that, you have the omicron concern,” Infrastructure Capital Management chief executive officer Jay Hatfield told Bloomberg.

Other investors also highlighted the threat posed by omicron.

“COVID-19 remains a threat to the global economy. Initial evidence suggests omicron is more transmissible but results in less severe illness compared to previous variants,” CBA analysts said in a note.

British Prime Minister Boris Johnson said on Monday that he was prepared to tighten restrictive measures if needed, and the variant is spreading rapidly in Europe. In the U.S., omicron now accounts for 73% of all sequenced U.S. cases, according to federal estimates.

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