Asian stocks fall on concern about virus, tighter Fed policy
ASIAN stock markets followed Wall Street lower on Monday, December 20, 2021, amid concern about the coronavirus’s latest variant and tighter Federal Reserve policy.
Shanghai, Tokyo, Hong Kong and Sydney retreated at the start of a trading week that will be shortened by the Christmas holiday.
Wall Street fell Friday, December 17, as traders took money off the table after the Fed indicated it would fight inflation by speeding up withdrawal of economic stimulus.
The spread of the omicron variant has fueled fears that renewed curbs on business and travel might worsen supply chain disruptions and boost inflation.
“Omicron threatens to be the Grinch to rob Christmas,” Mizuho Bank’s Vishnu Varathan said in a report. “The jury is out, which squares with a market that prefers safety to nasty surprises.”
The Shanghai Composite Index fell 0.5 percent to 3,613.50 and the Nikkei 225 in Tokyo tumbled 1.7 percent to 28,055.28. The Hang Seng in Hong Kong sank 0.9 percent to 22,976.86.
The Kospi in Seoul retreated 1.4 percent to 2,975.70 and Sydney’s S&P-ASX 200 lost 0.2 percent to 7,288.30.
New Zealand gained while Singapore and Jakarta retreated.
The US government warned Sunday of a possible surge of “breakthrough infections” due to Americans traveling for the Christmas and New Year holidays.
Stocks briefly rallied but then fell last week after Fed officials said they were willing to speed up withdrawal of stimulus that has boosted financial markets.
Also potentially weighing on sentiment, a US senator said Sunday he wouldn’t support President Joe Biden’s US$2 trillion infrastructure, social spending and climate plan.
Joe Manchin’s announcement possibly dooms the plan’s chances in the evenly split Senate. (AP)
