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Asia-Pacific Stocks Fall Amid Renewed Covid Uncertainty; Oil Drops 3%

Major Asia-Pacific markets fell in Tuesday trade as investors in the region continued to track developments surrounding the omicron variant.

Major markets in the region fell after Moderna CEO Stephane Bancel told the Financial Times that he expects existing vaccines to be less effective against the new variant. Bancel told CNBC on Monday that it could take months to develop and ship an omicron specific vaccine.

Hong Kong’s Hang Seng index was among the region’s biggest losers, falling about 1.8% as of its final hour of trading.

Asian Market Chart
Hang Seng Index Performance Chart

South Korea’s Kospi also declined 2.42% on the day to 2,839.01. In Southeast Asia, the Straits Times index in Singapore fell 1.5% in afternoon trade.

Japan’s Nikkei 225 dropped 1.63% to close at 27,821.76 while the Topix index shed 1.03% to 1,928.35.

The Japanese yen, often seen as a safe-haven currency, strengthened to 113.10 per dollar as compared with levels around 113.9 seen earlier against the greenback.

Meanwhile, spot gold prices rose 0.36% to $1,791.47 after seeing an earlier low of $1,783.46.

Mainland Chinese stocks closed mixed, with the Shanghai composite marginally higher at 3,563.89 while the Shenzhen component fell about 0.1% to 14,795.73.

Data released Tuesday showed Chinese factory activity unexpectedly growing in November, with China’s official manufacturing Purchasing Managers’ Index for November coming in at 50.1. That was above expectations by analysts in a Reuters poll for a reading of 49.6.

PMI readings below 50 represent contraction while those above that level signify expansion. PMI readings are sequential and represent month-on-month expansion or contraction.

The S&P/ASX 200 in Australia advanced 0.22% on the day to 7,256. While the MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.6%.

Asian Markets Oil and Currencies

Oil prices fell in the afternoon of Asia trading hours, reversing earlier gains. International benchmark Brent crude futures were down 3.15% to $71.13 per barrel. U.S. crude futures also dropped 3.06% to $67.81 per barrel.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.055 after rising to around 96.4 recently.

The Australian dollar was at $0.7112, still struggling to recover after last week’s drop from above $0.725.

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