Asian stocks fall on Evergrande and Omicron
Asian stocks followed overnight losses by their US peers on Friday, with traders weighing the economic threat of virus restrictions versus optimism about the effectiveness of vaccines.
Chinese markets are the focus of investor attention after China Evergrande Group (恆大 集團) and Kaisa Group Holdings Ltd (佳 兆 業 集團) officially defaulted on their US dollar debt.
Evergrande shares fell around 2%. Kaisa’s shares, which are also traded in Hong Kong, remained on hold.
TAIEX fell 0.49% to 17,826.26 points on Friday, but added 0.73% for the week.
The Sydney S & P / ASX 200 fell 0.4% on Friday, reducing its weekly gain to 1.6%.
Seoul’s KOSPI fell 0.6% on Friday, but rose 1.4% for the week.
Tokyo shares closed lower on Friday after Wall Street halted a three-day rally and investors awaited a key US inflation report due later today.
The benchmark Nikkei 225 fell 1%, or 287.70 points, to 28,437.77, for a weekly gain of 1.46%.
The wider TOPIX slipped 0.77%, or 15.31 points, to 1,975.48 for a weekly gain of 0.9%.
The Hang Seng index fell 1.1% to 23,995.72, while the index of Chinese enterprises fell 0.9% to 8,578.33 points.
For the week, the Hang Seng index rose 1%, while the Chinese business index rose 1.5%.
Investors are considering the cost to contain the Omicron strain of SARS-CoV-2 amid growing fears it will hamper the economic rebound. One study found that Omicron was 4.2 times more transmissible than the Delta variant in its early days.
The US Department of Labor reported the fastest inflation in nearly 40 years on Friday, with the consumer price index rising 6.8% last month from a year earlier.
The inflation indicator climbed 0.8% in October, beating expectations and continuing a trend of large increases that started earlier this year
“Miscellaneous FOMC [Federal Open Market Committee] participants, including [Fed] Chair [Jerome] Powell, signaled a hawkish shift in focus, catalyzed by growing unease over high inflation amid robust growth and continued strengthening of labor market conditions, ”Morgan Stanley economists and strategists wrote Thursday, including Ellen Zentner, in a note. .
“We are revising our call from the Fed and now expect the FOMC to start raising rates in September 2022, two quarters earlier than our previous forecast,” they said.
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