Asian shares tick up but Omicron worries leave markets on edge

Hong Kong, Dec. 2 (BNA): Asian shares rose in choppy trading Thursday, buoyed by advances in Chinese real estate stocks, although concerns over the novel coronavirus Omicron variant capped gains regionally.

Fed Chairman Jerome Powell’s comments also weighed on stock markets, as he reiterated that he and fellow policymakers would consider a faster end to the Fed’s bond-buying program, a move widely seen as opening the door to earlier price increases. interest, according to Reuters. .

This helped support the dollar which, despite the cautious mood, gained strength over the yen, which is usually seen as a safer haven than the dollar.

MSCI’s broadest index of Asia Pacific shares outside Japan advanced 0.2%, supported by blue-chip Chinese stocks by 0.25% and Hong Kong by 0.2%.

Hong Kong’s main developer index rose 2% after news late Wednesday that Chinese developers plan to sell bonds in China to raise a total of 18 billion yuan ($2.83 billion); Evidence that Beijing is marginally easing liquidity pressures on the cash-strapped sector.

However, Japan’s Nikkei lost 0.6%, and all three major Wall Street indexes fell more than 1% overnight as the global rally faded as news about the coronavirus variant Omicron turned negative.

Omicron is fast becoming the dominant variant of the coronavirus in South Africa less than four weeks after it was first detected there, and the United States on Wednesday became the latest country to identify an Omicron case within its borders.

“All anyone can do right now is wait for every major title as it crashes, as there are a series of outstanding questions about the new variant that remain largely unanswered and will remain unanswered for days or weeks,” said analyst Kyle Rhoda. The Melbourne Brokerage IG Markets.

He added that with the Fed cutting stimulus and building on rate hikes, “this is the first time in a really long time that markets haven’t taken a bad development as yet another excuse to buy stocks expecting an increase in liquidity from fueling it.”

And in another sign of the safety trend, long-standing US Treasury yields fell in late US trading hours. The yield on the 30-year bond fell to 1.740%, the lowest level since early January, and the benchmark 10-year yield fell to 1.404% – the lowest level in nine weeks.

Yields at the short end of the curve have been firmer amid the possibility that the US Federal Reserve will speed up bond buying.

On Wednesday, the second day of his testimony before Congress, Powell said the Fed needs to be prepared to respond to the possibility that inflation will not abate in the second half of next year as most forecasters currently expect.

This will likely lead to an acceleration of the Fed’s curtailment of its asset purchase program.

“We now expect the (Federal Reserve Policy Committee) to finalize asset purchases in April 2022 and begin raising the funds rate in June 2022,” CBA analysts said in a morning note.

The dollar index was flat, although the dollar rose about 0.25% to 113 yen, regaining a few of its recent losses, thanks to the hawkish tone.

The risk-sensitive Australian dollar was put at $0.7114, not far from Tuesday’s low of $0.7063, its lowest since early November last year.

Oil prices also rebounded, albeit after a strong sell-off in recent days based on concerns that the new alternative will affect travel.

Brent crude futures rose 0.9% to $69.48 a barrel, and US crude futures rose 0.76% to $66.08 a barrel, although they are still within sight of Tuesday’s more than three-month low.

Spot gold fell 0.12% to $1,780 an ounce.

HF