- Asian shares were mixed Tuesday as investors continued to cautiously weigh how much damage the new omicron coronavirus variant may unleash on the global economy.
- Hong Kong’s Hang Seng dipped 1.1% to 23,580.13, while the Shanghai Composite added 0.3% to 3,571.91.
- On Wall Street, the S&P 500 rose 1.3% to recover more than half of its drop from Friday, which was its worst since February.
- But it’s not all the way back to where it was before omicron.
- In energy trading, benchmark U.S. crude surged $1.03 to $70.98 a barrel.
Asian stocks were muted on Tuesday as investors assessed the potential impact of the new omicron coronavirus type on the global economy as reported by ABC News.
Higher economic risks
Japan’s benchmark Nikkei 225 rose 1.0% to 28,577.34 in morning trading.
South Korea’s Kospi lost 0.4% to 2,898.40.
“Sentiments may ride on the positive handover from Wall Street overnight, but with the slower vaccination rate and more limited healthcare capacity in the region, uncertainty from the new omicron variant may seem to bring about higher economic risks for the region at a time where it is shifting towards further reopening,” Yeap Jun Rong, market strategist at IG in Singapore, said of the omicron’s impact on Asia.
The vaccination rollout rate varies by country in the region, at about 77% in Japan, 50% in Vietnam and 35% in Indonesia.
Worries also remain about how effective current vaccines may be against omicron.
Wall street
On Wall Street, the S&P 500 rose 1.3% to recover more than half of its drop from Friday, which was its worst since February.
With vaccines in hand — and with the benefit of a weekend to mull whether Friday’s sharp market moves were overdone — analysts said the world may be in a better position to weather this newest potential wave.
The variant appears to spread more easily, and countries around the world have put up barriers to travel in hopes of stemming it.
“At the same time, we’ve been living with COVID-19 for almost 20 months now, and we’ve seen multiple variants.”
It ended with a gain of 236.60 points, or 0.7%, at 35,135.94.
Cause for concern
The most powerful lift for stocks came from those that have been able to grow strongly almost regardless of the economy’s strength or pandemic’s pall.
Gains for five big tech-oriented stocks — Microsoft, Tesla, Apple, Amazon and Nvidia — alone accounted for more than a third of the S&P 500’s rise.
Moderna jumped 11.8% for the biggest gain in the S&P 500, adding to an even bigger gain from Friday after it said it’s testing the effectiveness of its vaccine against omicron.
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 force.
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 line operators Carnival and Norwegian Cruise Line notched gains.
S&P 500
All told, the S&P 500 rose 60.65 points to 4,655.27, while the Nasdaq added 291.18 points to 15,782.83.
The index slipped 3.96 points, or 0.2%, to 2,241.98.
It tends to rise and fall with expectations for the economy’s strength and for inflation.
But it’s not all the way back to where it was before omicron.
Besides waiting on more clues about how much economic damage omicron will ultimately do, the market has several big mileposts this week that could swing prices.
The headliner is likely Friday’s jobs report, where economists expect to see an acceleration in hiring by employers during November.
Omicron
“Omicron reinforces that the economy remains tethered to the pandemic,’’ Mark Zandi, chief economist at Moody’s Analytics, said on Twitter Monday.
Economic growth slowed to an annual rate of 2.1% from July through September from 6.7% from April through June and 6.3% from January through March.
The S&P 500 had its worst month of the year in September, falling 4.8%.
Zandi tweeted that “the most likely scenario is the economy will manage through each wave better than the one before it.’’
Of course, the only way to know which scenario will ultimately occur is to wait to see it through.
Brent crude, the international standard, gained $1.02 to $74.46 a barrel.
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Source: ABC News
