Asian markets retreated on Monday as Omicron continued to cast a shadow over trading floors with poor US jobs data and China’s tech firm woes adding to the gloom.
The Omicron variant has now been detected right across the globe but no deaths have yet been reported, with authorities racing to determine how contagious it is and how effective existing vaccines are at fighting it.
Top US pandemic advisor Anthony Fauci said on Sunday that while more information was needed, preliminary data on the severity of the Omicron variant are “a bit encouraging.”
Nevertheless, the new strain has sparked fears that the global recovery could be put in jeopardy, as governments reimpose restrictions that many had hoped were now behind us.
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“Omicron-related uncertainty will linger while market participants wait to learn about the severity, infectiousness and resistance of the strain,” Kim Mundy, a strategist at Commonwealth Bank of Australia, said in a note.
Tracking those virus fears – as well as signs of a looming hawkish shift in US rates – Tokyo closed lower. Seoul and Sydney were up.
The benchmark Nikkei 225 index slipped 0.36%, or 102.20 points, to 27,927.37, while the broader Topix index fell 0.53%, or 10.32 points, to 1,947.54.
Also down was Hong Kong, where news last week that Chinese ride-hailing giant Didi Chuxing would start the process of delisting from the New York Stock Exchange has sent shares in tech firms tumbling.
China’s Regulatory Crackdowns
The move comes in the wake of a sweeping Chinese regulatory crackdown over the past year that has clipped the wings of major internet firms wielding huge influence on consumers’ lives – including Alibaba and Tencent.
Shares on the Hang Seng Tech index, which represents the 30 largest tech companies, slumped by over 3% in afternoon trading on Monday. At the close, the overall Hang Seng Index was 1.76% down, or 417.31 points, to 23,349.38.
Alibaba fell up to 8.3% in early trading, after the firm announced the biggest reshuffle of its top management since a massive fine for antitrust violations.
Also suffering blowback from the Didi delisting was Japanese conglomerate Softbank – whose Vision Fund owns a substantial piece of the ride-hailing giant – which also lost 8% on the firm’s woes and other regulatory bad news.
China Evergrande’s Struggles
Piling on the woes in Hong Kong was continued uncertainty over the future of the Chinese property market, after developer Evergrande warned that in light of its current liquidity situation, there was “no guarantee that the group will have sufficient funds to continue to perform its financial obligations.”
In mainland China, Shanghai and Shenzhen both closed down after a day of fluctuation, while European markets opened up. The Shanghai Composite Index was down 0.50%, or 18.13 points, to 3,589.31, while the Shenzhen Composite Index on China’s second exchange fell 1.22%, or 30.88 points, to 2,495.50.
Losses in the US also dragged markets down, after a week that saw the Federal Reserve signal a plan to accelerate the withdrawal of its monetary stimulus and potentially hike rates sooner.
Disappointing US jobs data on Friday contributed to the pessimism, showing the world’s largest economy added just 210,000 jobs last month – fewer than half the increase forecasters expected.
Key figures
Tokyo > Nikkei 225: DOWN 0.36% at 27,927.37 (close)
Hong Kong > Hang Seng Index: DOWN 1.76% at 23,349.38 (close)
Shanghai > Composite: DOWN 0.50% at 3,589.31 (close)
New York > Dow: DOWN 0.2% at 34,580.08 (close)
- AFP with additional editing by Sean O’Meara
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