Asian Stock Market: Consolidates Omicron-led losses amid cautious optimism

Asian shares trade mostly higher during early Tuesday, paring the Omicron-linked losses as policymakers reject chatters of economic setback while data from China impressed buyers. That said, MSCI’s index of Asia-Pacific shares outside Japan print 0.25% intraday loss but Japan’s Nikkei 225 rises 0.75% heading into the European session.

US President Biden shrugged off the need for lockdowns while Fed Chair Jerome Powell stayed intact on his inflation view and US Treasury Secretary Janet Yellen pushes Congress to overcome the US debt limit deadlock, as well as highlighting the strength of the US economy. Additionally, global medicine suppliers’ optimism to have the vaccines for the strain and policymakers’ ability to take quick measures to tame the Omicron breakout favor the bulls. Also keeping the market players hopeful is the current conditions of the global economies versus the initial days of the pandemic.

Elsewhere, China’s headline NBS Manufacturing PMI jumped back to expansion territory with above 50.0 numbers for the first time in three months but Non-Manufacturing PMI eased below market consensus and prior readouts during November. Following the data release, China says, “Economic mood is improving as 3 PMIs show expansion.”

While this helps China data, Aussie stocks have an additional positive in the form of downside housing numbers that erode talks of the Reserve Bank of Australia’s (RBA) rate hikes. It’s worth noting that New Zealand’s NZX 50 leads the region’s gainers as tighter border controls and faster covid vaccinations keep Auckland optimistic while the Reserve Bank of New Zealand Chief Economist and Head of Economics Yuong Ha rejects concerns of using bond holding for monetary purposes.

India’s BSE Sensex also rises above 1.0% amid hopes of firmer Q3 GDP and the lowest daily jump in coronavirus cases at home since May 2020.

On the other hand, South Korea’s KOSPI drop over 1.0% on mixed data whereas Hong Kong’s Hang Seng joins the league with fears of further Omicron cases at home.

Against this backdrop, US Treasury yields remain pressured with the headline 10-year bond coupon down three basis points (bps) to 1.50% at the latest. Though, S&P 500 Futures print mild gains at the latest.

Looking forward, US CB Consumer Confidence for November and covid updates will also be important for markets ahead of Friday’s jobs report.

Read: Yields, S&P 500 Futures portray cautious optimism, coronavirus variant is the key