Asia markets climb as COVID fears recede
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As fears about the Omicron coronavirus strain dissipated and more favorable economic data from the United States pleased investors, Asian markets have climbed on Friday, extending their rally.
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Inflation rose to its highest level in four decades.
Fears about the Omicron coronavirus strain eased, and more favorable economic data from the United States encouraged investors; consequently, Asian markets climbed on Friday, extending their rally.
Studies demonstrating that Omicron infections are less likely to result in hospitalization, as well as the US approval of Merck and Pfizer drugs to add to a growing arsenal of weaponry against COVID, have fueled expectations that the pandemic will have a smaller economic impact.
"Omicron is looking more like a short-term disruption to the economic outlook and not a destructive headwind that knocks the economy off its course," Edward Moya, Senior Market Analyst with OANDA, a foreign exchange company, said.
Following a slew of generally positive US economic statistics, the S&P 500 concluded the last session before the holiday weekend at a new high.
Consumer spending increased in November, though at a slower pace, according to Commerce Department data, while new home sales increased.
Inflation spikes, unemployment rates remain steady
Unemployment claims remained unchanged from the previous week, although orders for big-ticket manufactured products increased, owing primarily to aircraft.
Inflation, on the other hand, rose to its highest level in four decades, highlighting the Federal Reserve's delicate balancing act between containing inflationary pressures and keeping the economy on pace.
Omicron "will create some slowdowns in the economy, perhaps some slowdowns of production which could add to inflation pressures in the short term," Paul Christopher, head of global market strategy at Wells Fargo Investment Institute, told Bloomberg Television, adding however that the economy would work its way through the situation.
Most Asian markets rose, albeit in lighter trade, due to some stock exchanges being closed or operating on abbreviated sessions ahead of the Christmas holiday.
After half-day sessions, Hong Kong gained 0.1%, while Singapore and Sydney gained 0.4%. Tokyo was up 0.1%, Seoul and Taipei were also up, but Shanghai was one of the few cities to lose ground, sliding 0.4%.
