Hong Kong, November 30 (BNA): Asian stock markets traded in positive territory Tuesday as investors became cautiously optimistic that the new alternative to Omicron might not cause widespread global economic disruption to exacerbate the coronavirus pandemic.
The open higher was followed by a brighter lead from Wall Street on Monday, which reacted to news from US President Joe Biden that new shutdowns as a result of the variable were off the table for the time being.
MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.52% higher on Tuesday.
In Australia, the S&P/ASX200 was up 1.15% while Japan’s Nikkei was trading 1.2% higher early in the session, according to Reuters.
Hong Kong’s Hang Seng Index underperformed, down 0.25% while China’s CSI 300 Index rose 0.13%.
Official data showed on Tuesday that activity in China’s service sector grew at a slightly slower pace in November, as the sector took a hit from new lockdown measures as authorities raced to contain the latest outbreak.
Data from the National Bureau of Statistics showed that the official non-manufacturing PMI fell to 52.3 in November from 52.4 in October.
The best performance across Asian stock markets came after a virus-led sell-off late last week when global investors were concerned that the alternative could lead to further shutdowns, potentially hampering an economic recovery.
“All my clients and colleagues were net buyers on Monday and today,” said John Milroy, a consultant at Ord Minnett in Sydney.
“There is certainly another new variable, but unless there are renewed and widespread closings, the V-shaped recovery is in order, particularly in the US, the earnings outlook remains intact and households are full of cash.”
Despite Tuesday’s positive opening, advisors say some investors remain cautious about the impact of Omicron in disrupting trade, travel and economic activity.
“There are a lot of unknowns about Omicron and the market has been jumping in the shadows,” said James Rosenberg, Sydney financial advisor at EL&C Baillieu.
“After such a strong run and with high valuations, the market will always be subject to individual volatility in news that may bring risk.”
Tuesday’s gains came after the Dow Jones Industrial Average on Monday rose 236.6 points, or 0.68%, to 35,135.94, the Standard & Poor’s rose 60.65 points, or 1.32%, to 4,655.27, and the Nasdaq Composite rose 291.18 points, or 1.88%, to. 15,782.83.
In Asian trading, the yield on the benchmark 10-year Treasury was at 1.5192% compared to its US close of 1.529% on Monday.
The two-year yield, which rose as traders expected an increase in the Fed funds rate, rose to 0.502% compared to the US close of 0.51%.
Gold was lower on other markets consolidation and fell 0.7% to $1,783.1 an ounce in the US session, but rose slightly early in Asia to be neutral.
US crude jumped 1.43 percent to $70.95 a barrel. Brent crude rose to $74.4 a barrel.
HF