SYDNEY- Stocks rose in choppy trade on Thursday as worries about the economic impact of the Omicron coronavirus variant ebbed but increasing caution ahead of US inflation data capped other risk assets such as oil and the Australian dollar.
Bonds were nursing losses since a brighter virus outlook leaves a clearer path to higher rates. Traders’ focus was turned to the release of inflation data on Friday and a Federal Reserve meeting next week for indications on hike timing.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5 percent to a two-week high. Japan’s Nikkei was steady, having gained 3.5 percent in the previous two sessions.
S&P 500 futures were steady after a 0.3 percent rise in the cash index overnight carried it to within 1 percent of a new record high.
“Volatility remains elevated as the drip of news around Omicron continues,” said analysts at ANZ Bank, and beyond it looms an expectation of higher US interest rates in 2022.
“An acceleration in the pace of tapering by the Fed is almost being treated as a foregone conclusion. But a strong number could ramp up expectations of a hike in Q2 next year.”
On Wednesday, BioNTech and Pfizer said a three-shot course of their COVID-19 vaccine was able to neutralize the Omicron variant in a laboratory test.
Market sentiment has also recovered with other pieces of preliminary data suggesting Omicron is less severe than first feared, though offsetting that has been the imposition of tougher restrictions in England to curb Omicron’s spread. – Reuters
