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Saturday, June 25, 2022

Asian markets bounce back from global omicron selloffs

BANGKOK — Asian shares were mostly higher on Tuesday after a worldwide slump for financial markets spurred by worries about how badly the omicron variant, inflation and other forces will hit the world economy.

Tokyo’s Nikkei 225 index
NIK,
+1.98%

rose 2% and the Hang Seng
HSI,
+0.56%

in Hong Kong added 0.2%. In Seoul, the Kospi
180721,
+0.63%

gained 0.5%, while the Shanghai Composite index
SHCOMP,
+0.70%

picked up 0.4% . In Sydney, the S&P/ASX 200
XJO,
+0.86%

climbed 0.5%. Stocks fell in Malaysia
FBMKLCI,
-0.03%

and Indonesia
JAKIDX,
+0.01%
,
but rose in Singapore
STI,
+0.36%

and Taiwan
Y9999,
+0.74%
.

Much of the concern over the outlook has been driven by the omicron variant of coronavirus. Cases have skyrocketed in Europe and in the U.S., federal health officials have announced it accounted for 73% of new infections last week, a nearly six-fold increase in only seven days.

In Asia, cases of coronavirus have surged in Australia and South Korea, as governments tighten precautions to prevent or curb outbreaks.

Shares fell around the world on Monday. Stocks of oil producers helped lead the way lower after the price of U.S. crude fell 3.7% on concerns the newest coronanvirus variant could lead factories, airplanes and drivers to burn less fuel.

Oil prices advanced early Tuesday, with U.S. crude
CLF22,
-3.10%

gaining 81 cents to $69.42 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude
BRNG22,
+1.01%
,
the international standard, rose 69 cents to $72.21 per barrel.

Omicron may be the scariest force hitting markets, but it’s not the only one. A proposed $2 trillion spending program by the U.S. government took a potential death blow over the weekend when an influential senator said he could not support it. Markets are also still absorbing last week’s momentous move by the Federal Reserve to more quickly remove the aid it’s throwing at the economy, because of rising inflation.

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

They all combined to drag the benchmark S&P 500
SPX,
-1.14%

1.1% lower to 4,568.02. The Dow Jones Industrial Average
DJIA,
-1.23%

fell 1.2%, to 34,932.16. The Nasdaq Composite
COMP,
-1.24%

fell 1.2%, to 14,980.94.

In currency trading, the U.S. dollar
USDJPY,
+0.08%

rose to 113.65 Japanese yen from 113.61 yen.

Source

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