Stock markets: Global shares mostly rally despite Omicron worries
Global shares mostly rose on Wednesday amid jittery trading on worries about the latest coronavirus variant.
France’s CAC 40 was up 0.5% in early trade to 6,751.87, while Germany’s DAX was up 0.7% to 15,206.89. Britain’s FTSE 100 rose 1.1% to 7,137.60. US shares edged higher with Dow futures up 0.5% at 34,617.00. S&P 500 futures rose 0.8% to 4,602.50.
Japan’s benchmark Nikkei 225 rose 0.4% to 27,935.62. South Korea’s Kospi rose 2.1% to 2,899.72. Australia’s S&P/ASX 200 fell 0.3% to 7,235.90. Hong Kong’s Hang Seng rose 0.8% to 23,658.92, while the Shanghai Composite added 0.4% to 3,576.89.
The discovery of the Omicron variant in Japan and other countries has raised concerns that further measures to contain the infection could hurt tourism and other economic activities. Experts say it may take several weeks before they better understand whether the Omicron variant causes serious illness.
Japan banned all foreign visitors starting Tuesday as an emergency precaution against the new variant. The ban is expected to last until the end of the year. The government also requires Japanese citizens arriving in the country to quarantine for a maximum of 14 days.
Tuesday’s move included some exceptions such as foreigners with permanent residence permits and their spouses, children and students receiving government scholarships.
On Wednesday, the government said such exceptions would be eliminated for foreigners entering from South Africa and nine neighboring countries. According to broadcaster NHK TV, stricter border control measures could begin.
Anderson Alves, a trader at ActivTrades, said Asian markets are worried after an overnight slide in Wall Street and comments from Moderna’s CEO that an existing COVID-19 vaccine may be less effective. more effective for Omicron than previous variants.
“Traders will be looking for new insights into the new variant and its impact on the current vaccine framework,” said Alves.
Markets were also concerned about the actions of the US Federal Reserve after the head of the agency said it would consider stopping financial market support earlier than expected. Fed Chair Jerome Powell told Congress this week that the central bank could stop the billions of dollars in bond purchases it makes monthly “perhaps a few months sooner.”
It moved quickly to complete purchases, meant to boost the economy by lowering interest rates on mortgages and other long-term loans, in June. That would open the door for the Fed to raise short-term interest rates from near-zero record lows and dilute a key factor that sent stocks to record highs, allaying fears of an oversold market. expensive.
If Omicron ends up taking a toll on the global economy, it could put the Federal Reserve in a tough spot. Usually, the central bank lowers interest rates, which encourages borrowers to spend more and investors to pay higher prices for stocks. But low rates can also encourage inflation, which is already high in the global economy.
In energy trading, benchmark US crude added $2.54 to $68.72 a barrel in electronic trading on the New York Mercantile Exchange. It fell $3.77 to $66.18 a barrel on Tuesday. Brent crude, the international standard, fell $2.46 to $71.69 a barrel.
In currency trading, the US dollar rose to 113.56 Japanese yen from 113.11 yen. The euro is priced at $1.1311, down from $1.1337.