Omicron covid variant impact, oil prices, dollar moves
SINGAPORE — Asia-Pacific markets were mostly muted in early trade Thursday as investors assessed risks surrounding the omicron Covid variant.
The Nikkei 225 in Japan dipped 0.04% while the Topix index slipped 0.08%.
South Korean shares advanced, with the benchmark Kospi up 0.19% and the Kosdaq higher by 0.56%.
Stateside, the major averages posted a third consecutive day of gains while European shares closed lower.
“After a solid run in the previous two days, equities are taking a breather with European shares closing lower amid concerns over the need for a new round of covid restrictions,” Rodrigo Catril, senior foreign-exchange strategist at the National Australia Bank, said in an early morning note.
Investors are keeping an eye on the omicron Covid variant, which has rattled markets in recent weeks.
The World Health Organization on Wednesday said the variant could change the course of the pandemic. Scientists worldwide are scrambling to determine just how contagious and lethal omicron is and how effective would existing vaccines be against the virus.
While preliminary evidence from South Africa, where the variant was first identified, may suggest that omicron is milder than the delta strain, WHO’s technical lead on Covid-19 says it is “too early to conclude” that.
The U.S. dollar slipped against a basket of its peers — the dollar index last traded at 95.984, dropping from an earlier high of 96.379.
Oil prices advanced overnight as the global benchmark Brent settled above $75 a barrel.
During Asian trading hours on Thursday, prices also climbed. U.S. crude traded 0.33% higher at $72.6.
“Crude oil extended recent gains as inventories fell and concerns ease about the impact of Omicron on consumption,” ANZ Research analysts said in a morning note.
“Pfizer and BioNTech said initial lab studies show a third dose of their vaccines restores protection against the new variant. This has seen Brent crude rally more than 9% over the past two days as the market reassesses the likely impact on demand,” the analysts said. Still, risks to demand have not entirely diminished, they added.