Asia Pacific stocks are down today as investors continue to digest the new COVID-19 strain which is said to be vaccine-resistant. Investors continue to assess the risks to global economic recovery posed by the latest omicron COVID-19 strain.
Japan’s Nikkei 225 is down 1.63%, trading 28,283.92 basis points. South Korea’s KOSPI is down 0.92%, trading 2,909.32 basis points. Hong Kong’s Hang Seng Index is down 1.12%.
China’s Shanghai Composite is down 0.039%, currently trading 3,562.70 basis points while the Shenzhen Component is up 0.22%, currently trading 14,810.20 basis points. A Peking University study said China would face a major surge in COVID-19 cases on a scale beyond anything any other country has yet seen if it were to reopen similarly to the U.S.
What you should know
- Two South African health experts, including South African Medical Association chairperson, Angelique Coetzee, suggested the Omicron variant is presenting with mild symptoms so far. However, the World Health Organization cautioned that it would take time to assess the strain and has classified it as a “variant of concern.”
- Moderna Inc. Chief Medical Officer, Paul Burton stated a reformulated shot for the new strain could be available in early 2022. Whether the omicron outbreak is a brief scare or a more serious blow to an economic recovery already pressured by the prospect of tighter monetary policy is still open to debate.
- TD Securities global head of rates strategy Priya Misra told Bloomberg, “We really need some more answers to figure out the impact on growth. Risk assets are pricing in uncertainty.”
- Other investors were more optimistic. Tribeca Investment Partners Pty. portfolio manager Jun Bei Liu told Bloomberg, “Markets have traded through all previous COVID-19 variants and just touched all-time highs. My expectation is we will do the same for this one.”
Japanese Prime Minister Fumio Kishida on Monday announced the Government will halt as of November 30, its recent change to its border control policies that had allowed foreign business travellers and trainees to enter the country after a long, pandemic-related hiatus.
That being said, investors should brace up for a very volatile week. Venkateswaran Lavanya of Mizuho Bank said in a note; “Financial market volatility will likely persist through this week.”