Asian markets were mixed in morning trade Wednesday, as a holiday “Santa Claus rally” showed signs of fatigue and continued fears over the Omicron variant as well as uncertainty about economic prospects for 2022 weighed on markets.
Covid-19 cases have surged across the world, prompting governments to impose new measures to limit contagion while the travel industry faced thousands of flight cancellations.
Warnings from the WHO that the risks from the variant remains “very high” have compounded the sense of gloom that the pandemic is far from over, though data showing a reduced risk of hospitalization have lifted spirits.
Reflecting the uncertainty, Tokyo opened flat in thin holiday trade on Wednesday, with analysts expecting the market to face some downward pressure for technical reasons related to dividend payments.
Seoul was also down, while Sydney and Wellington rose.
In China, markets fell, with Hong Kong’s Hang Seng Index down as investor’s eyed uncertain prospects for 2022 as well as a continued debt crisis in the mainland’s property market.
A continued regulatory clampdown by Beijing on overseas listings by Chinese firms has also weighed down markets — though expectations that the country’s central bank will add further stimulus in 2022 offered some hope.
But trading volumes remain broadly thin going into the new year, when prospects for global growth and the long-term impact of the Omicron variant are expected to become clearer.
“You don’t have a trend going one way or the other,” said Maris Ogg of Tower Bridge Advisors.
Moody’s economist Mark Zandi predicted the Omicron wave will dent growth in the first quarter, but “not have a material impact” on 2022 growth overall because of a rebound later in the year, he said in a note.
There was also optimism on oil markets, with crude holding a roughly one-month high on hopes that the Omicron variant will not dent global travel in the ways many had feared. (©Philippine Daily Inquirer 2021)
