Asian stocks face drop as omicron continues to spread

The Omicron variant continues to worry people across the globe including the investors. As the investors remain worried of the new variant, the oil prices and Asian stocks dipped on December 14, 2021. The investors were already at the edge of a series of the central bank decisions and an important Federal Reserve Meeting. The broadest index of Asia-Pacific shared of MSCI outside Japan was down by 0.46percent. Even the CSI300 index of China was down by 0.41percent. This happened after the health authorities in Tianjin were left worried after the first omicron case was detected.

Some of the big Chinese manufacturing province Zhejiang is also facing a major crisis related to COVID-19. Thousands of Chinese citizens remain quarantined and the areas where the virus has hit hard have suspended business operations. The fear of the omicron variant and the potential hawkish tone from the Fed had derailed the confidence of the investors. John Milroy, an advisor at Ord Minnett in Sydney said that an increase was expected of tapering by Fed that helps to increase the interest rates. That would have also made the market an interesting place.

Milroy added that there could be a reason why people could expect to see the money back in to cash for some while and there are also expectations that the beginning of 2022 could be volatile. Before the upcoming meetings, the dollar edged higher and the investors had hopes that Fed would begin to increase interest rates in 2022. It was clarified by Edward Moya, the senior analyst at OANDA that volatility would remain higher through the decisions from ECB, Fed and BOE.

The fears about the omicron variant had increased after British Prime Minister Boris Johnson had warned of a new wave of the new variant. Even the World Health Organization had warned about the new variant and called it ‘concerning’ and ‘extremely contagious’.

Photo Credits: Pixabay

About the author