Global stocks mostly rise despite growing concerns over Omicron variant

Global stocks were mostly higher on Wednesday amid nervous trading amid concerns over the latest variant of the coronavirus.

The French CAC 40 rose 0.5% at the start of the session to 6,751.87, while the German DAX gained 0.7% to 15,206.89. The UK FTSE 100 jumped 1.1% to 7,137.60. US stocks were expected to drift higher as Dow futures rose 0.5% to 34,617.00. Futures contracts on S&P 500 rose 0.8% to 4,602.50.

Japan’s Nikkei 225 benchmark rose 0.4% to close at 27,935.62. South Korea’s Kospi jumped 2.1% to 2,899.72. The Australian S & P / ASX 200 fell 0.3% to 7,235.90. The Hong Kong Hang Seng gained 0.8% to 23,658.92, while the Shanghai Composite gained 0.4% to 3,576.89.

The detection of the omicron variant in Japan and other countries has raised concerns that new measures to contain infections could stifle tourism and other economic activities. Experts say it can take weeks to gain a better understanding of whether the omicron variant is causing serious illness.

Japan has banned all foreign visitors from Tuesday as an emergency precaution against the new variant. The ban is extended provisionally until the end of the year. The government is also demanding that Japanese nationals arriving in the country be quarantined for up to 14 days.

Tuesday’s decision included some exceptions such as foreigners with permanent residence permits and their spouses and children and government scholarship students.

On Wednesday, the government said those exceptions would be removed for foreigners entering from South Africa and nine neighboring countries. Further tighter border controls could come into effect, according to state broadcaster NHK TV.

Anderson Alves, a trader at ActivTrades, said Asian markets were nervous after a day’s drop on Wall Street and comments from Moderna CEO that existing COVID-19 vaccines may be less effective against omicron than variants previous ones.

Traders will be looking for new information regarding the new variant and its impact on the current vaccine framework, Alves said.

Markets are also concerned about the actions of the US Federal Reserve after its leader said he would consider ending his support for financial markets sooner than expected. Fed Chairman Jerome Powell told Congress this week that the central bank could stop the billions of dollars in bond purchases it makes every month perhaps a few months earlier.

He was on track to complete the purchases, intended to boost the economy by lowering rates on mortgages and other long-term loans, in June. This would open the door for the Fed to raise short-term interest rates from their record high of near zero and dilute a major factor that sent stocks to record highs, allaying concerns about an overpriced market.

If omicron ends up causing heavy damage to the global economy, it could put the Federal Reserve in a difficult position. Usually, the central bank will lower 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 across the global economy.

In energy trading, benchmark US crude added $ 2.54 to $ 68.72 per barrel in electronic trading on the New York Mercantile Exchange. It plunged from $ 3.77 to $ 66.18 a barrel on Tuesday. Brent crude, the international standard, fell from $ 2.46 to $ 71.69 per barrel.

In currency trading, the US dollar rose to 113.56 Japanese yen from 113.11 yen. The euro cost $ 1.131, compared to $ 1.1337.

(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)

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