Asian markets mostly up, oil picks up as virus and Fed gain attention

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Asian markets mostly rose on Wednesday as oil prices rebounded as traders assess the outlook for the global economy after major drugmakers expressed divergent views on the effectiveness of their Omicron vaccines and the Federal Reserve has taken a hawkish pivot on monetary policy.

A slight recovery from the large losses of the previous two days reversed in the region on Tuesday after Moderna director Stéphane Bancel told the Financial Times that existing vaccines may not be as effective against the new strain of Covid in because of its multitude of mutations.

However, other drugmakers later said it was far too early to pass judgment, the boss of BioNTech, who took a shot with Pfizer, said it was likely people would be protected from it. severe symptoms.

The less alarming outlook from other companies helped calm nerves slightly, while news that Moderna, Pfizer and Russian vaccine supporters Sputnik V are already working on a vaccine specific to Omicron also brought some comfort.

With medical experts saying Omicron’s full outlook was still being assessed, analysts said the markets would remain volatile.

“If by next week the medical gurus conclude that the existing vaccines are ‘sufficient’ and / or that Omicron’s virulence is milder than the current Delta variant, the market is expected to rebound strongly,” said declared strategist Louis Navellier.

“Conclusions in the other direction could weigh heavily on the current bullish outlook for 2022,” he added.

“Such uncertainty is likely to push some people on the sidelines who want to lock in the large gains they have already set aside for 2021.”

Tokyo and Hong Kong, both of which moved south soon after Bancel’s comments were released, saw much-needed gains in the early exchanges, while Shanghai, Singapore, Seoul, Wellington, Taipei and Jakarta also posted increase.

Sydney, which closed ahead of the interview’s publication on Tuesday, edged down slightly, although losses were tempered by data showing Australia’s economy contracted less than feared in the third quarter.

Crude – which was roughed up on Friday and again on Tuesday amid fears over possible further lockdowns and their impact on demand – also benefited from some headway, with the two main contracts rising by more than 2%.

The largely positive performance in Asia came after Fed boss Jerome Powell put the central bank on track to phase out its sweeping financial support measures at a faster pace than first announced and of rising interest rates next year.

With prices soaring at the fastest pace in three decades, Powell told lawmakers that “the risk of more persistent inflation has clearly increased.”

Having for most of the year insisted that inflation was ‘transient’ due to supply chain grunts and high energy costs, he for the first time left the word out and said that ‘It was “appropriate, in my opinion, to consider closing our asset purchases … perhaps a few months earlier”.

With the bond buying program put in place at the start of the pandemic – and key to economic recovery – likely to end sooner, analysts now suggest the bank could raise rates perhaps twice as much. by the end of 2022.

“In all likelihood, the Fed will now step up its rate of reduction and possibly complete it by March, leaving the possibility of a rate hike to finally push inflation back,” StoneX’s Matt Simpson said. Financial.

– Key figures around 03:00 GMT –

Tokyo – Nikkei 225: UP 0.8% at 28,047.62 (pause)

Hong Kong – Hang Seng Index: Up 1.5% to 23,823.90

Shanghai – Composite: EN up 0.2% to 3,572.13

West Texas Intermediate: EN up 2.3% to $ 67.69

North Sea Brent: UP 2.6% to $ 71.05

Dollar / yen: UP at 113.45 yen vs. 113.16 yen at 2125 GMT

Pound / dollar: up $ 1.3302 from $ 1.3295

Euro / dollar: DOWN to $ 1.1322 from $ 1.1336

Euro / pound: DROP to 85.11 pence against 85.23 pence

New York – Dow: DOWN 1.9% to 34,483.72 (close)

London – FTSE 100: DOWN 0.7% to 7,059.45 (close)

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