Asian stocks advanced on Tuesday after investors were buoyed by reports that the Omicron coronavirus variant might prove less dangerous than previously feared.
The new variant has already been detected across the globe but no deaths have yet been reported, with authorities worldwide racing to determine how contagious it is and how effective existing vaccines are.
Top US pandemic adviser Anthony Fauci said over the weekend that, while more information was needed, preliminary data on the variant’s severity was “a bit encouraging.”
“That was all markets needed to hear really and equity markets in Europe and the US followed Asia’s lead and piled back in,” said Jeffrey Halley, a senior market analyst at OANDA. “Unsurprisingly, travel and leisure led the way while technology only rose modestly.”
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Sentiment was also boosted by moves from China’s central bank to limit the economic fallout from debt crises in the country’s property sector.
The Hang Seng Index was up 2.72%, or 634.28 points, to 23,983.66. The Shanghai Composite Index was up 0.16%, or 5.78 points, to 3,595.09, while the Shenzhen Composite Index on China’s second exchange fell 0.72%, or 18.01 points, to 2,477.49.
Chinese e-commerce giant Alibaba was a strong performer, up by more than 12% when Hong Kong trading ended.
Bargain-hunters moved in on the company’s shares – recently pummelled by Beijing’s crackdown on big tech – after the virus news and central bank announcement.
In Japan, the benchmark Nikkei 225 index jumped 1.89% or 528.23 points to end at 28,455.60, while the broader Topix index gained 2.17% or 42.31 points to 1,989.85.
Omicron Variant Fears
“Share buying surged as excessive fears about the Omicron variant have eased,” Okasan Online Securities said in a note.
Singapore, Jakarta, Wellington and Seoul were all slightly up, as was Manila. Bangkok was up by more than 1%.
On Monday, European and US equities had rebounded on the Omicron news.
Wall Street also had a strong day, with the Dow up 1.9%. But in China, the spectre of potential debt defaults by property giants loomed.
Reports on Tuesday said embattled developer Evergrande was planning what could become China’s biggest debt restructuring, wrapping in all its offshore obligations as it faced default on a key payment.
Sunshine 100 Payment Deadline
The company’s shares were up by 1.10% in Hong Kong at the close as its struggles have continued to fan concerns about China’s property sector, which forms a substantial part of the world’s second-biggest economy.
Another major property player, Sunshine 100 China Holdings, also said it had missed a repayment deadline.
In response to the crisis, China’s central bank said Monday it would cut the reserve requirement ratio by 0.5 percentage points for most banks, effective December 15.
The move reduces the amount of cash the banks must hold in reserve, which will allow 1.2 trillion yuan ($188.4 billion) to be injected into the economy over the long term, the central bank said in a statement.
China’s real estate industry has cooled in recent months after Beijing tightened home-buying rules and launched a regulatory assault on speculation.
Key figures around 0810 GMT
Tokyo > Nikkei 225: UP 1.89% at 28,455.60 (close)
Hong Kong > Hang Seng Index: UP 2.71% at 23,983.66 (close)
Shanghai > Composite: UP 0.16% at 3,595.09 (close)
New York > Dow: UP 1.9% at 35,227.03 (close)
London > FTSE 100: UP 0.8% at 7,289.75
- AFP with additional editing by Sean O’Meara
Read more:
Some Evergrande Bondholders Not Paid, Debt Restructuring Looms
Investors ‘Less Alarmed’ About Risk of Evergrande Default
