HONG KONG- Asian shares extended gains on Wednesday, continuing a global relief rally as markets found positive news in early reports about the potential impact of the Omicron variant, although overnight advances in oil prices began to peter out.
“Markets are very sensitive to any slight new item relating to Omicron, and the absence of bad news is being taken very positively by equity markets, though – and I’m not a scientist – it seems too early to signal an all clear,” said Stefan Hofer, chief investment strategist for private bank LGT in Asia Pacific
“With each new variant, we go through a period of waiting for some signal from the scientific community, which is difficult for markets, but that’s what we got yesterday.”
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3 percent and Japan’s Nikkei rose 1 percent. US S&P 500 futures rose 0.25 percent.
British drugmaker GSK said on Tuesday its antibody-based COVID-19 therapy with US partner Vir Biotechnology is effective against all mutations of the new Omicron coronavirus variant.
Also a South African study on Tuesday suggested that booster doses of the COVID-19 vaccine produced by Pfizer Inc and partner BioNTech’s could help to fend off infection from Omicron, even though the study showed the new strain can partially evade the protection from two vaccine doses.
Those reports helped MSCI’s all-country world index to close 2.1 percent higher on Tuesday, in its biggest percentage gain since November 2020. Oil also rose over 3 percent.
Markets are also focused on US CPI data due Friday, with a high print likely to point policy makers towards accelerating the tapering of the Federal Reserve’s massive bond buying program which has put a floor under equity prices since the start of the pandemic. – Reuters
