Asian markets mixed amid Omicron threat

HONG KONG, China: Asian markets were mixed on Friday as traders tracked developments in the Omicron virus strain as it spreads around the world, fueling concerns about the economic recovery, just as the Federal Reserve sets the stage to withdraw its vast PANDEMIC-ERA fiNANCIAL SUPPORT.

Hong Kong was among the having already lifted interest rates main losers with several duallisted twice as they face a battle against tech giants taking a hit soaring inflation. after US officials adopted a rule Eyes are now on the Federal allowing them to remove foreign Reserve which, after months of firms from Wall Street unless they saying the spike in prices was temporary, provided certain information to has now turned its focus auditors, a move primarily targeting on keeping them from running Chinese entities. out of control and is preparing to

Global markets have whipsawed tighten its belt. since the Omicron variant hit headlines Boss Jerome Powell suggested last Friday over concerns that this week the bank would likely it may be even more transmissible speed up the taper of its bondbuying than the Delta strain and that vaccines program and then focus may be less effective against it. on lifting borrowing costs.

While some of the initial panic While the moves have been well has died down, with some suggesting telegraphed, investors are now it could be milder and that having to adjust to the end of the inoculations would be effective, age of cheap cash, which has been experts have said it could take up a key driver of the rally in world to three weeks to get a full picture markets to record or multi-year of the outlook and its possible highs in 2021. economic impact.

For now, governments are playing it cautiously, imposing fresh containment measures including travel curbs and some lockdowns, which observers fear could knock the already shaky recovery off track.

Meanwhile, central banks continue to tighten their belts, having stumped up trillions of dollars to get through the initial jolt from the pandemic last year with some

US crackdown

“From an economic perspective, the variant will likely result in more protracted disruptions to supply chains as countries revamp restrictive measures, which will both hinder activity and contribute to sustained inflation,” said Silvia Dall’Angelo, at Federated Hermes.

“In other words, the trade-offs cenBloomberg tral banks are facing will likely intensify in the short term. Indeed, Powell suggested that the Fed’s approach to those trade-offs has started to shift, with concerns on high inflation now taking the front seat.”

Wall Street’s three main indexes ended sharply higher Thursday, though Asia struggled to pick up the baton.

Tokyo, Sydney, Seoul, Wellington and Jakarta all fell, though there were gains in Shanghai, Singapore, Taipei and Manila.

But Hong Kong dropped more than one percent with tech firms that are also traded on New York’s exchange among the worst performers after the Securities and Exchange Commission issued a mandate requiring companies to disclose whether they are “owned or controlled” by a government.

Beijing has refused to allow US officials to inspect audits of companies registered in China and Hong Kong, meaning they are likely to have to leave.

Chinese authorities were already cracking down on US-listed companies, citing national security concerns.

Giants including Alibaba, Tencent, JD.com and NetEase — which are all traded in the United States — fell sharply in Hong Kong.

Also Friday, ride-hailing firm Didi Chuxing — which is not listed in Asia — said it would delist from New York and begin preparations to begin trading in Hong Kong.

The development is the latest to highlight the frosty relations between China and the United States, which have been at odds on a range of issues including security and technology.

Oil prices extended Thursday’s gains after OPEC and other key producers decided to continue their output increases despite the threat of Omicron to demand, and the recent move to tap reserves led by the United States.

Crude initially dropped but recovered after the OPEC+ group opened the door to turn the taps down if the virus is seen to be hitting demand.

Key figures around 0300 GMT

Tokyo - Nikkei 225: DOWN 0.2 percent at 27,692.34 (break)

Hong Kong - Hang Seng Index: DOWN 1.0 percent at 23,561.50

Shanghai - Composite: UP 0.2 percent at 3,581.87

West Texas Intermediate: UP 0.7 percent at $66.97 per barrel

Brent North Sea crude: UP 0.5 percent at $70.02 per barrel

Euro/dollar: DOWN at $1.1296 from $1.1306 at 2150 GMT

Dollar/yen: DOWN at 113.11 yen from 113.17 yen

Pound/dollar: DOWN $1.3287 from $1.3298

Euro/pound: UP at 85.01 pence from 84.96 pence

New York - Dow: UP 1.8 percent at 34,639.79 (close)

London - FTSE 100: DOWN 0.5 percent at 7,129.21 (close)