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Effects of the Omicron Covid variant, oil prices, dollar movements

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SINGAPORE – Asia-Pacific markets traded mixed on Thursday as investors assessed the risks associated with the Omicron-Covid variant.

The Nikkei 225 in Japan fell 0.47% to 28,725.47 while the Topix index fell 0.57% to 1,990.79.

In Australia, the ASX 200 was down 0.28% to 7,384.50 with most sectors closing lower. The energy and commodities sub-indices fell 1.09% and 0.51%, respectively. Shares in major mining companies Rio Tinto and BHP fell 0.94% and 1.2%, respectively.

South Korean stocks rose, with the benchmark Kospi gaining 0.93% to 3,029.57 and the Kosdaq gaining 1.67% to 1,022.87.

Mainland Chinese stocks also traded higher. The Shanghai composite rose 0.97% to 3,673 and the Shenzhen component rose 1.23% to 15,147.87.

Hong Kong stocks also rose as the major Hang Seng index rose 1.01% while the tech-focused Hang Seng Tech index rose 2.18% in late afternoon trading.

Trading in shares of the Macau-based Suncity Group and its Summit Ascent Holdings unit has been suspended. The Hong Kong Stock Exchange did not provide any further details about the suspension. That comes days after Suncity’s CEO was arrested for alleged links to cross-border gambling, Reuters reported.

Hong Kong-listed stocks of major Chinese technology companies rose. Alibaba’s shares rose 2.4%, Baidu rose 1.38%, Meituan rose 0.98% and Tencent rose 1.2%.

Major indices in India, Indonesia and Singapore also traded higher on Thursday afternoon.

In the US, major averages posted gains for a third straight day while European stocks closed lower.

“After a solid run for the past two days, stocks are taking a breather, with European stocks closing lower on concerns about the need for a new round of Covid restrictions,” said Rodrigo Catril, senior foreign exchange strategist at National Australia Bank in an early morning note.

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Omicron concerns

Investors are keeping an eye on Omicron’s Covid variant, which has rocked the markets for the past few weeks.

The World Health Organization said Wednesday the variant could change the course of the pandemic. Scientists around the world are trying to find out how contagious and deadly omicrons are and how effective existing vaccines against the virus would be.

While preliminary evidence from South Africa, where the variant was first identified, may suggest that Omicron is milder than the Delta strain, the WHO technical director on Covid-19 says it is “too early to conclude” .

Meanwhile, Pfizer’s CEO said people may need a fourth Covid-19 shot sooner than expected. It did so after preliminary research showed that the Omicron variant can undermine protective antibodies created by the vaccine the company developed with BioNTech.

The vaccine makers released results from an initial laboratory study on Wednesday showing that a third dose of vaccine was effective in controlling the Omicron variant, while the initial two-dose series of vaccinations significantly reduced its ability to protect against the new strain.

Currencies and oil

The US dollar rebounded slightly against a basket of its competitors – the dollar index rose 0.12% to 96.013 from its previous closing price of 95.984.

The Japanese yen remained relatively unchanged, changing hands at 113.64 per dollar, while the Australian dollar traded slightly higher at $ 0.7178.

Oil prices rose overnight as the global Brent benchmark hovered above $ 75 a barrel.

During the Asian trading hours on Thursday, prices also rose. U.S. crude rose 0.65% to $ 72.83 while Brent rose 0.45% to $ 76.16.

“Crude oil has extended recent gains as inventories plummeted and concerns about Omicron’s impact on consumption eased,” analysts at ANZ Research said in a morning release.

“Pfizer and BioNTech said initial laboratory studies show that a third dose of their vaccines will restore protection against the new variant. This has resulted in Brent crude rising more than 9% in the past two days as the market reevaluates the likely impact on demand, ”analysts said. Still, the risks to demand have not completely diminished, they added.

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