Asian markets rebound after massive omicron sales

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Asian stocks were mostly higher on Tuesday after a global meltdown in financial markets spurred by concerns about the severity of the omicron variant, inflation and other forces that will hit the global economy.

Tokyo gained nearly 2% and other benchmarks in Asia were also higher.

Much of the concern about the outlook is due to the omicron variant of the coronavirus. Cases have skyrocketed in Europe and the United States, federal health officials said it accounted for 73% of new infections last week, a nearly six-fold increase in just seven days.

In Asia, coronavirus cases have increased in Australia and South Korea, as governments step up precautions to prevent or curb outbreaks.

Tokyo’s Nikkei 225 index rose 2% to 28,496.83 and the Hang Seng in Hong Kong rose 0.3% to 22,798.23. In Seoul, the Kospi gained 0.3% to 2,972.79, while the Shanghai Composite Index gained 0.2% to 3,601.53. In Sydney, the S & P / ASX 200 climbed 0.4% to 7,323.90.

Shares fell around the world on Monday. Inventories of oil producers helped pave the way down after the price of U.S. crude fell 3.7% over fears the latest variant of the coronavirus could lead factories, planes and drivers to consume less fuel.

Oil prices advanced Tuesday morning, with US crude gaining 81 cents to $ 69.42 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international pricing standard, rose 69 cents to $ 72.21 a barrel.

Omicron may be the scariest force hitting the markets, but it’s not the only one. A $ 2 trillion spending program proposed by the US government suffered a fatal blow over the weekend when an influential senator said he could not back it. Markets also continue to absorb the Federal Reserve’s momentous decision to cut back on aid to the economy more quickly due to rising inflation.

They all combined to bring the benchmark S&P 500 down 1.1% to 4,568.02. The Dow Jones Industrial Average fell 1.2% to 34,932.16. The Nasdaq composite fell 1.2% to 14,980.94.

Small business stocks performed less well than the rest of the market. The Russell 2000 Index fell 1.6% to 2,139.87.

Occidental Petroleum slipped 3.8%, topping a long list of losses in oil stocks. Commodity producers, tech companies and financial stocks also fell amid omicron concerns. Steelmaker Nucor fell 5.8%, Microsoft slipped 1.2% and Synchrony Financial, which offers branded credit cards and other financial products, fell 5.2%.

The Dutch government began a strict national lockdown on Sunday, while a British official said on Monday it could not guarantee that new restrictions would not be announced this week. The Natural History Museum, one of London’s top attractions, said on Monday it was closing for a week due to “a lack of indoor staff.”

In the United States, President Joe Biden will announce the new measures he is taking on Tuesday, “while issuing a stern warning of what winter will be like for Americans who choose to remain unvaccinated,” the attache said. press release from the White House over the weekend.

Another dreaded outcome of the omicron variant is that it could push inflation even higher and if it leads to closures of ports, factories and other key points in long global supply chains leading to customers, it could worsen already tangled operations.

These problems helped push consumer prices up 6.8% in November from the previous year, the fastest inflation in nearly four decades.

But some economists argue that omicron could have the opposite effect: If the variant causes blockages or causes consumers to stay at home, economic activity could slow, and with it, the growing demand that has overwhelmed retail chains. supply and pushes up consumer prices.

In the worst-case scenario, the economy would slow down without relieving the already built-in inflation.

In currency trading, the US dollar rose from 113.61 yen to 113.65 Japanese yen. The euro strengthened to $ 1.1286 from $ 1.1283.

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AP Business Writers Damian J. Troise, Alex Veiga and Stan Choe contributed.