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Stock Selloff Set to Continue in Asia on Omicron: Markets Wrap – BNN Bloomberg


(Bloomberg) — The global equity selloff looked set to continue in Asia on Monday amid uncertainty about how the omicron coronavirus strain will impact global economic reopening. Currency markets steadied after Friday’s volatility.

Equity futures for Japan fell more than 2%, and those for Australia and Hong Kong over 1%. The S&P 500 last week had its worst post-Thanksgiving performance since 1941, oil’s slump topped 10% and the yield on 10-year Treasuries slid the most since March 2020.

The U.S. dollar rose modestly against the yen and euro in early trading in Sydney. Two South African health experts — including the doctor who first sounded the alarm about the omicron — suggested the variant is presenting with mild symptoms so far. The World Health Organization urged caution, saying it will take days to several weeks to gauge the strain’s severity. 

Traders last week pushed back the expected timing of a first 25-basis-point rate increase by the Federal Reserve to July from June. Fed Bank of Atlanta President Raphael Bostic played down the risk of the new Covid-19 variant to the U.S. economy and said he was open to scaling back asset purchases at a faster pace to keep inflation in check.

Investors are trying to work out if the omicron flareup ends up being a relatively brief scare that market eventually rebound from, or a bigger blow to the global economic recovery. The prospect of less generous monetary policy to tackle price pressures was already complicating the outlook.

“We really need some more answers to figure out the impact on growth,” said Priya Misra, global head of rates strategy at TD Securities. “Risk assets are pricing in uncertainty.”

Moderna Inc.’s chief medical officer said a reformulated shot to combat the new strain could be available early in the new year.

Emerging markets will be in the spotlight after taking some of the biggest hits from the virus jitters. In China, a Peking University study predicted the nation would face a major Covid surge on a scale beyond anything any other country has yet seen if it were to reopen in a similar manner to the U.S. 

In cryptocurrencies, Bitcoin steadied over the weekend and was trading around $55,800 after sinking on Friday.

For more market analysis, read our MLIV blog.

Some of the main moves in markets:

Stocks

  • The S&P 500 fell 2.3%
  • The Nasdaq 100 fell 2.1%
  • Nikkei 225 futures fell 2.8%
  • Australia’s S&P/ASX 200 Index futures dropped 1.4%
  • Hang Seng Index futures lost 1.2% earlier

Currencies

  • The Japanese yen fell 0.4% to 113.83 per dollar
  • The offshore yuan was at 6.3950 per dollar
  • The Bloomberg Dollar Spot Index fell 0.3%
  • The euro fell 0.1% to $1.1301

Bonds

  • The yield on 10-year Treasuries declined 16 basis points to 1.47%

Commodities

  • West Texas Intermediate crude fell 13% to $68.15 a barrel
  • Gold rose 0.8% to $1,802.59

©2021 Bloomberg L.P.





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