Asian stocks edge higher on Omicron fears

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Asian stocks edge higher on Omicron fears

People wearing protective masks are shown on an electronic board showing Japan's stock prices outside a brokerage in Tokyo.

SINGAPORE Reuters -- Asian stocks edged higher on Tuesday on receding worries about the impact of the Omicron variant, while Chinese markets gained after the central bank eased monetary policy.

The broadest index of Asia-Pacific shares outside Japan moved 0.6% on Monday after declining to the lowest level in a year.

Hong Kong markets are ranked among the big losers, while Indian and Taiwanese stocks are outperformed this year, as the benchmark has lost 6% this year.

Australia's S&P ASX 200 rose 0.5% on Tuesday, while Japan's Nikkei advanced 1.1% as risk-on sentiment pushed U.S. stocks higher.

China's CSI 300 index gained 0.7% and Hong Kong's Hang Seng Index increased 1.3% as the central bank freed up $188 billion in liquidity through policy easing.

The People's Bank of China said on Monday it would reduce the amount of cash banks must hold in reserve, its second move this year, releasing the funds in long-term liquidity to help slowing economic growth.

The world's second-largest economy, which had a rebound from last year's pandemic slump, has lost momentum as it struggles with a slowing manufacturing sector, debt problems in the property market and persistent COVID 19 outbreaks.

According to Vishnu Varathan, head of economics and strategy at Mizuho Bank, said Monday that the move was a convenient, if not coincident, cushion for Evergrande's looming debt default.

Evergrande shares rose 7% after hitting a record low on Monday, as markets waited for the real estate giant to pay $82.5 million coupons with a 30 day grace period coming to an end.

Markets were supported by gains on Wall Street, where economically sensitive stocks outperformed.

Markets arguably believed last week's brutal sell-off should have been milder, said Varathan from Mizuho Bank, while epidemiologists have warned against premature conclusions on Omicrons.

Early assessments of Omicron cases have been declared mild, spurring half-full relief. Omicron has been found in about a third of the U.S. states, but the Delta version accounts for the majority of COVID 19 infections in the United States, health officials said on Sunday. Anthony Fauci, the top U.S. infectious disease official, told CNN that Omicron does not look like it has a great degree of severity. Wall Street closed with a sea of green as value stocks, led by banks and energy shares, rose 1.5% compared to a 0.9% gain in growth stocks.

The risk-on mood helped the dollar move against safe-haven currencies such as the Japanese yen, which lost 0.6% overnight, and the risk-friendly Australian dollar also found buyers, as well as the risk-friendly Australian dollar. The expectation that the Federal Reserve will speed up its bond buying program when they meet next week in response to the tightening labour market was also supported by the FRX. They are likely to hike rates earlier than projected to keep inflation down.

Oil prices moved higher, a nearly 5% rebound the day before, as concerns about the impact of the Omicron variant on global fuel demand eased.

After falling 4.6% higher on Monday, the price of crude futures rose 0.6% to $73.5 a barrel. O R Gold prices were steady at $1,779. The consumer price data is projected to show an increase in inflation later this week, and that's 5 per ounce.