Hong Kong: Asian markets were mixed in early trading on Wednesday, as the holiday “Santa Claus rebound” showed signs of fatigue, continued concerns about Omicron variants and uncertainty about the economic outlook in 2022 put pressure on the market.
Covid-19 cases have surged across the world, prompting governments to impose new measures to limit contagion while the travel industry faced thousands of flight cancellations.
Warnings from the WHO that the risk from the variant remains “very high” have compounded the sense of gloom that the pandemic is far from over, though data showing a reduced risk of hospitalisation have lifted spirits.
Reflecting the uncertainty, Tokyo opened flat in thin holiday trade on Wednesday, with analysts expecting the market to face some downward pressure for technical reasons related to dividend payments.
Seoul also fell, while Sydney and Wellington rose.
In China, the market fell and Hong Kong’s Hang Seng Index fell as investors were concerned about the uncertain outlook for 2022 and the ongoing debt crisis in the mainland real estate market.
Beijing’s continued regulatory suppression of Chinese companies’ overseas listings has also weighed on the market-although the expectation of further stimulus by the central bank of the country in 2022 has brought some hope.
But entering the new year, transaction volumes are still generally low, and the global growth prospects and the long-term impact of the Omicron variant are expected to become clearer by then.
“You don t have a trend going one way or the other,” said Maris Ogg of Tower Bridge Advisors.
Moody s economist Mark Zandi predicted the Omicron wave will dent growth in the first quarter, but “not have a material impact” on 2022 growth overall because of a rebound later in the year, he said in a note.
“Even after the Omicron wave abates, there will almost surely be others. But we expect each new wave to be less disruptive to the healthcare system and economy than the wave before it,” he said.
Katie Nixon, chief investment officer for Northern Trust Wealth Management, was also upbeat, saying her firm was “pretty constructive going into 2022”.
“We re having fits and starts related to this omicron variant of course. This will create maybe demand delayed but not destroyed,” she told Bloomberg TV.
There is also optimism in the oil market. With the hope that the Omicron variant will not weaken global travel as many people feared, crude oil prices remain at a high level of about a month.