Wednesday, January 19, 2022

Global stocks mostly rally despite growing omicron concerns

TOKYO (AP) – Global stocks were mostly higher on Wednesday amid nervous trading over concerns over the newest variant of the coronavirus.

France’s CAC 40 added 0.5% in early trading to 6,751.87, while Germany’s DAX added 0.7% to 15,206.89. The UK’s FTSE 100 jumped 1.1% to 7,137.60. US stocks are set to rally, while Dow futures are up 0.5% to 34,617.00. S&P 500 futures were up 0.8% at 4,602.50.

The Japanese benchmark Nikkei 225 rose 0.4% to 27,935.62. South Korean 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 added 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 elsewhere has raised fears that further infection control measures could stifle tourism and other economic activity. Experts say it may take weeks before they better understand whether the omicron variant is causing serious illness.

Japan has banned all foreign visitors since Tuesday as an extreme precaution against the new option. The ban will roughly last until the end of the year. The government also requires Japanese citizens arriving in the country to be quarantined for up to 14 days.

Tuesday’s move included some exceptions, such as foreigners with permanent residence permits and their spouses, children and students receiving government scholarships.

The government said Wednesday that such exemptions will be lifted for foreigners entering from South Africa and nine neighboring countries. Other stricter border control measures may come into force, NHK TV reported.

Anderson Alves, a trader at ActivTrades, said Asian markets were nervous after an overnight downturn on Wall Street and comments from Moderna CEO that existing COVID-19 vaccines may be less effective against omicron than earlier options.

“Traders will be looking for new ideas about the new option and its impact on the current vaccine design,” Alves said.

Markets are also worried about the actions of the US Federal Reserve System after its head said that he would consider ending support for financial markets earlier than expected. Fed Chairman Jerome Powell told Congress this week that the central bank could end monthly purchases of billions of dollars of bonds, “perhaps a few months earlier.”

In June, he managed to complete purchases designed to spur the economy by cutting rates on mortgages and other long-term loans. This will open an opportunity for the Fed to raise short-term interest rates from their all-time lows to near-zero levels and weaken the main factor that has propelled equities to record highs, removing concerns about an overly expensive market.

If the omicron ends up doing serious damage to the global economy, it could put the Fed in a quandary. Typically, the central bank lowers interest rates, which encourages borrowers to spend more and investors to pay higher prices for shares. But low rates can also fuel inflation, which is already high throughout the global economy.

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

In foreign exchange trading, the US dollar rose to 113.56 yen from 113.11 yen. The euro was worth $ 1.1311, up from $ 1.1337.

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Yuri Kageyama on Twitter https://twitter.com/yurikageyama

Nation World News Deskhttps://nationworldnews.com
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