Asian markets rose on Tuesday following strong gains on Wall Street as investors bet a surge in Covid-19 cases due to the fast-spreading Omicron variant will not derail the economic recovery.
The highly mutated strain has fuelled a massive increase in cases across the globe, with countries reviving lockdowns, thousands of flights cancelled and cruise ships returning to port with Covid-infected passengers.
There is, however, a “belief that Omicron is going to be a nuisance but not a dire strait for the global economy — at least not for long,” said Briefing.com analyst Patrick O’Hare.
Wall Street enjoyed strong gains, with the S&P 500 powering ahead 1.4 percent to a second straight record on Monday while the Dow and Nasdaq added at least one percent.
It was the start of a historically strong seven-day post-Christmas stretch known on trading floors as the “Santa Claus rally,” a period of low trading volumes and light news flow that usually sees stocks drift higher.
The optimism carried over to Asia, with Tokyo up 1.0 percent by the break Tuesday. Singapore, Taipei and Jakarta saw gains while Seoul edged higher. Sydney and New Zealand were still closed for the holiday break.
“Today’s shares are expected to stay strong after a rebound. US stocks are trading higher in the midst of a Santa Claus rally, and risk-on trends are likely to spread to Japanese stocks,” Okasan Online Securities said.
Shanghai was down 0.1 percent while Hong Kong was flat in a see-saw session as Macau casino stocks fell sharply after the gaming enclave reported its first Omicron case.
Oil futures rose in Asia, with benchmark WTI trading above $75 and Brent heading towards $79 a barrel.
Tokyo – Nikkei 225: UP 1.0 percent at 28,952.76 (break)
Hong Kong – Hang Seng Index: FLAT at 23,221.84
Shanghai – Composite: DOWN 0.1 percent at 3,611.67
Euro/dollar: DOWN at $1.1323 from $1.1329 late on Monday
Pound/dollar: DOWN at $1.3433 from $1.3440
Euro/pound: DOWN at 84.23 pence from 84.26 pence
Dollar/yen: DOWN at 114.86 yen from 114.88 yen
West Texas Intermediate: UP 0.3 percent at $75.76 per barrel
Brent North Sea crude: UP 0.2 percent at $78.73 per barrel
New York – Dow: UP 1.0 percent at 36,302.38 (close)
Frankfurt – DAX: UP 0.5 percent at 15,835.25 (close)
London – FTSE 100: FLAT at 7,372.10 points (Friday close)