Asian markets were boosted on Thursday by positive news about the likely scale of the threat of the new Omicron variant and upbeat economic data from the US.
The upbeat pre-holiday mood was helped by two preliminary studies from the UK indicating Omicron infections were less likely to result in hospitalisation compared with the Delta variant, confirming a trend first identified in South Africa.
The cautious optimism was also lifted by news that the US Food and Drug Administration had authorised Pfizer’s anti-Covid pill, providing fresh tools to battle the disease.
New cases of the highly mutated Omicron strain continued to soar, but market watchers are becoming more confident the health effects will be milder than with earlier strains.
Wall Street closed with healthy gains after US data showed consumers remained upbeat about the economy despite the rise of the fast-spreading Omicron strain.
The Conference Board’s consumer confidence index jumped nearly four points to 115.8 compared to the prior month.
Sentiment was also boosted by revised data from the US Commerce Department showing GDP expanded at a faster annual rate of 2.3% in the third quarter, up from earlier estimates of 2.1%.
The positive mood carried over into Asia, with Tokyo advancing as regional markets climbed across the board.
The benchmark Nikkei 225 index added 0.83%, or 236.16 points, to 28,798.37 at the close, while the broader Topix index rose 0.91%, or 17.92 points, to 1,989.43.
“The market remains generally optimistic, although there are concerns about the Omicron variant’s spread, particularly during the year-end and New Year season when people move around,” Okasan Online Securities said.
X’ian Covid Lockdown
Even a Covid lockdown in the Chinese city of Xi’an failed to dampen enthusiasm, with Shanghai closing higher and Hong Kong up too.
The Hang Seng Index advanced 0.40%, or 91.31 points, to 23,193.64. The Shanghai Composite Index rose 0.60%, or 20.72 points, to 3,643.34, while the Shenzhen Composite Index on China’s second exchange added 0.20%, or 4.45 points, to 2,524.74.
In Europe, Paris and Frankfurt ticked higher at the open while London was marginally lower.
“A cocktail containing better US Q3 GDP data, along with positive Omicron headlines further inoculated financial markets against a year-end sell-off overnight,” OANDA’s Jeffrey Halley said.
“It would take some huge downside misses from the US data dump to unsettle what appears to be an inevitable Santa rally on Wall Street into the end of the week,” he added, ahead of the release of US jobless claims, personal spending and durable goods orders later Thursday.
Key figures around 0830 GMT
Tokyo > Nikkei 225: UP 0.8% at 28,798.37 (close)
Hong Kong > Hang Seng Index: UP 0.4% at 23,193.64 (close)
Shanghai > Composite: UP 0.6% at 3,643.34 (close)
London > FTSE 100: FLAT at 7,339.05
New York > Dow: UP 0.7% at 35,753.89 (close)
- AFP with additional editing by Sean O’Meara