By YURI KAGEYAMA
TOKYO (AP) – Asian stocks were mixed on Tuesday as investors continued to cautiously weigh how much damage the new omicron coronavirus variant could trigger to the global economy.
Japan’s benchmark Nikkei 225 rose 1.0% to 28,577.34 in morning trading. Australia’s S & P / ASX 200 rose 1.2% to 7,325.00. South Korea’s Kospi lost 0.4% to 2,898.40. Hong Kong’s Hang Seng fell 1.1% to 23,580.13, while the Shanghai Composite added 0.3% to 3,571.91.
Some analysts believe that a severe economic downturn, such as the one that occurred last year, is likely to be averted because more people have been vaccinated. But they also believe that a return to pre-pandemic levels of economic activity has been dramatically delayed, especially in sectors such as tourism. Consumption can also be damaged.
“Emotions may run on the positive handover from Wall Street overnight, but with the slower vaccination rate and more limited health capacity in the region, the uncertainty posed by the new omicron variant may appear to pose higher economic risks for the region at a time when it is shifting towards further reopening, ”said Yeap Jun Rong, marketing strategist at IG in Singapore, about omicron’s impact on Asia.
The roll-out rate for vaccination varies from country to country in the region by about 77% in Japan, 50% in Vietnam and 35% in Indonesia. In Asia, the omicron variant has only been officially discovered in Hong Kong, but the region is preparing for its wider arrival, which generally means a setback for economic reopening. There are still concerns about how effective current vaccines can be against omicron.
On Wall Street, the S&P 500 rose 1.3% to recover more than half of its fall from Friday, the worst since February. Bond yields and crude oil also regained chunks of what they lost in traders’ knees to run towards security and away from risky investments.
With vaccines in hand – and with the benefit of a weekend to consider whether Friday’s sharp market movements were exaggerated – analysts said the world may be in a better position to cope with this latest potential wave. Plus, Friday’s fall in the markets may have been exacerbated by many shoppers taking a day off after Thanksgiving.
But while the market stabilized, unrest still hangs over it due to the discovery of the omicron variant. The variant appears to be spreading more easily, and countries around the world have set up barriers to travel in hopes of curbing it.
“There are still more questions than answers regarding the new variant,” said Ryan Detrick, chief marketing strategist for LPL Financial. “At the same time, we’ve been living with COVID-19 for almost 20 months now, and we’ve seen several variants.”
Given the uncertainty, the Dow Jones Industrial Average faltered between a 3-point loss and a 388-point gain throughout the day. It ended with a gain of 236.60 points, or 0.7%, to 35,135.94.
The most powerful boost for stocks came from those who have been able to grow strongly almost regardless of the strength of the economy or the pandemic pallet. Gains for five major technology-oriented stocks – Microsoft, Tesla, Apple, Amazon and Nvidia – alone accounted for more than a third of the S&P 500’s rise. The gains for technology-oriented stocks also helped propel the Nasdaq mix to market-leading 1.9%.
Moderna rose 11.8% for the biggest gain in the S&P 500, adding an even bigger gain from Friday after it said it was testing the effectiveness of its omicron vaccine. Its CEO said in a television interview on ABC that it can take two to three months for a vaccine developed specifically for the variant to begin manufacturing.
Travel-related stocks started the day with gains, but fell back as more caution filtered into the market and as travel restrictions around the world remained in effect. They ended mixed after President Joe Biden said he was not considering a widespread U.S. lockdown. He said the variant was a cause for concern and “not a cause for panic.” Delta Air Lines and American Airlines closed slightly lower, while cruise lines Carnival and Norwegian Cruise Line noted progress.
Overall, the S&P 500 rose 60.65 points to 4,655.27, while the Nasdaq added 291.18 points to 15,782.83. The Russell 2000 Small Business Index was heading for its own recovery after climbing 1.6% in the beginning, but its progress slowed in the late afternoon. The index fell 3.96 points, or 0.2%, to 2,241.98.
“Because there is still so much unknown about the omicron variant, it can take us a week or more to regain what we lost in a single day,” said Sam Stovall, CFRA chief investment officer.
The yield on the 10-year government bond rose to 1.51% from 1.49% late Friday, recovering some of its steep fall from 1.64% that day. It tends to rise and fall with expectations of the strength of the economy and inflation.
The VIX, an index that measures how worried investors are about the coming falls for the S&P 500, also fell significantly. But it’s not quite back to where it was before omicron.
In addition to waiting for more clues as to how much financial damage omicron will ultimately do, the market has several major milestones this week that could fluctuate prices. The headline is likely Friday’s job report, which economists expect to see an acceleration in hiring employers during November.
Omicron is adding more risk to a global economy already struggling with crippling uncertainty. Travel bans, including recent decisions by Japan and Israel to block foreign visitors, threaten to disrupt global business. Global supply chains already inflated by bottlenecks could be further caught if outbreaks close factories, ports and shipyards.
Shipping problems would risk pushing prices higher, increasing inflationary pressures. In response, the world’s central banks may raise interest rates and jeopardize the recovery from last year’s brief but intense corona recession.
“Omicron is reinforcing that the economy remains tied to the pandemic,” Mark Zandi, chief economist at Moody’s Analytics, said on Twitter on Monday. “With each new wave of the pandemic, the economy will suffer slower growth and higher inflation.”
The US economic recovery lost significant momentum when the highly contagious delta variant hit over the summer. Economic growth slowed at an annual rate of 2.1% from July to September from 6.7% from April to June and 6.3% from January to March. The S&P 500 had the worst month of the year in September, down 4.8%.
Still, more Americans are vaccinated now, and the economy has shown resilience and is regaining momentum after the summer slump. Zandi tweeted that “the most likely scenario is that the economy will perform better through each wave than the one before it.”
Of course, the only way to know which scenario will eventually arise is to wait to see it through. And that uncertainty, meanwhile, could lead to more up-and-down fluctuations for the stock market, which has risen more than 24% this year and set a record as late as November 18th.
“We’re just going to be in the dark for weeks here,” LPLs Detrick said.
In energy trading, benchmark US crude rose $ 1.03 to $ 70.98 per barrel. barrel. Brent crude, the international standard, rose $ 1.02 to $ 74.46 per barrel.
In foreign exchange trading, the US dollar rose to 113.66 Japanese yen from 113.61 yen. The euro cost $ 1.1295, up from $ 1.1293.
AP Business Writers Damian J. Troise, Stan Choe, Paul Wiseman and Alex Veiga contributed.
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