By Associated Press
TOKYO — Asian shares were mostly higher Wednesday amid nervous trading due to worries over the newest coronavirus variant.
Japan’s benchmark Nikkei 225 /zigman2/quotes/210597971/delayed JP:NIK -0.27% was up 0.8% in morning trading, after gyrating earlier in the session. South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -0.89% jumped 1.7%, while Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -0.11% dipped 0.3%. Hong Kong’s Hang Seng /zigman2/quotes/210598030/delayed HK:HSI -0.43% gained 1.5%, while the Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP +0.80% was little changed, inching down less than 0.1%. Benchmark indexes in Singapore /zigman2/quotes/210597985/delayed SG:STI -0.24% , Taiwan /zigman2/quotes/210597977/delayed TW:Y9999 -0.79% , Malaysia /zigman2/quotes/210598052/delayed MY:FBMKLCI -0.80% and Indonesia /zigman2/quotes/210597981/delayed ID:JAKIDX -0.47% all edged higher.
The detection of the omicron variant in Japan, as well as Brazil , announced Tuesday, has raised fears that further measures to contain infections would squelch tourism and other economic activity. Experts say it may take weeks before they know more details about whether the omicron variant causes serious illness.
Anderson Alves, a trader at ActivTrades, said Asian markets were nervous after an overnight slide on Wall Street and comments from Moderna’s CEO that existing COVID-19 vaccines may be less effective with omicron than earlier variants.
“Traders will look for new insights regarding the new variant and its impact on the current vaccine framework,” Alves said.
Wall Street’s losses deepened after the head of the Federal Reserve said it will consider shutting off its support for financial markets sooner than expected.
The S&P 500 /zigman2/quotes/210599714/realtime SPX -1.52% fell 1.9%, erasing its gains from a day earlier. The sell-off accelerated after Fed Chair Jerome Powell told Congress the central bank may halt the billions of dollars of bond purchases it’s making every month “perhaps a few months sooner.” It had been on pace to wrap up the purchases, meant to goose the economy by lowering rates for mortgages and other long-term loans, in June.
An end to the purchases would open the door for the Fed to raise short-term interest rates from their record low of nearly zero. That in turn would dilute a major propellant that has sent stocks to record heights and swatted away concerns about an overly pricey market. As investors moved up their expectations for the Fed’s first rate hike following Powell’s remarks, yields on short-term Treasuries rose.
Losses for stocks mounted quickly, with the drop for the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -1.56% more than tripling in half an hour as it sank 711 points. The blue chip index ended down 652.22 points, or 1.9%, at 34,483.72.
The Nasdaq composite /zigman2/quotes/210598365/realtime COMP -1.79% held up slightly better than the rest of the market, shedding 245.14 points, or 1.6%, to 15,537.69.
The whammy on interest rates came after stocks were already weak in the morning due to concerns about how badly the fast-spreading omicron variant of the coronavirus may hit the global economy.
Much is left to be determined about the variant, including how much it may slow already gummed-up supply chains or scare people away from stores. That uncertainty has sent Wall Street through up-and-down jolts as investors struggle to handicap how much economic damage omicron will ultimately do.
“There will be heightened volatility around any piece of information,” said Kristina Hooper, chief global market strategist at Invesco. She said markets will likely remain cautious “before we know more.”
In energy trading, benchmark U.S. crude added $1.42 to $67.60 a barrel. Brent crude , the international standard, fell $2.87 to $70.57 a barrel.
In currency trading, the U.S. dollar /zigman2/quotes/210561789/realtime/sampled USDJPY -0.1291% gained to 113.44 Japanese yen from 113.18 yen.