Stocks in Asia are greatly mixed this week as investors are cautious about the rising risk and appearance of the Omicron variant of COVID-19. The shares of stocks in Asia were greatly varied this Thursday, with Japan’s Nikkei dropping 0.65%, South Korea’s Kospi losing 0.4%, Hong Kong’s Hang Seng rising 0.5%, and finally Shanghai Composite dropping 0.194%. Razer stocks in Hong Kong have dropped 7.87% while oil prices have jumped 1.41%.
Many analysts believe that a full-on economic downturn is unlikely due to the increasing amount of vaccinations, though it is likely that the return of pre-pandemic economic health will be delayed. Consumption and the tourism industry will likely be impacted. Many countries have already started implementing strategies to prevent traveling.
IG market strategist Yeap Jun Rong explained how, “the slower vaccination rate and more limited healthcare capacity in the region, uncertainty from the new omicron variant may seem to bring about higher economic risks for the region at a time where it is shifting towards further reopening.” About 77% of Japan is vaccinated while only 50% are in Vietnam and 35% in Indonesia. While there is only 1 case of the Omicron case in Asia, many Asian countries are bracing for its arrival, possibly slowing economic reopening.
Despite the wavering of many stock indexes, including the Dow Jones Industrial Average, big tech companies helped drive stocks up. Tech-oriented companies have helped lift Nasdaq up 1.9%. Moderna had the biggest jump in the S&P 500 with an increase of 11.8% after its effective vaccine against the omicron variant.
VIX, an index that measures how worried investors are for S&P 500 drops, eased its worry, however, there are still many uncertainties. The global economy is put at risk as major countries, such as Japan and Israel, have barred foreign visitors. Problems with shipping caused by the new variant could also drive up prices and inflation with it.