Stocks and oil prices rise after Omicron and Powell remarks drive slump

Stocks and oil prices rise after Omicron and Powell remarks drive slump

Asian equities rose and oil prices rebounded on Wednesday after a punishing session in which the economic impact of the Omicron coronavirus variant and hawkish comments from the chair of the US Federal Reserve weighed on global markets.

Most stock markets in Asia on Wednesday pared losses from the previous session, with Hong Kong’s Hang Seng index up 1.4 per cent and Japan’s Topix rising 0.7 per cent.

Futures markets tracking Europe’s Stoxx 600 index were up 0.7 per cent and those tracking Wall Street’s S&P 500 were up almost 1 per cent. The FTSE 100 was expected to rise 0.6 per cent.

The rebound came after markets dropped on Tuesday, after the chief executive of vaccine maker Moderna used an interview with the Financial Times to predict that existing jabs would be much less effective in dealing with Omicron than earlier strains of coronavirus.

Falls for global equities were compounded when Fed chair Jay Powell signalled that he would support faster monetary tightening by the US central bank to combat soaring inflation, despite the economic threat posed by the new variant.

The S&P 500 closed down almost 2 per cent, while the tech-focused Nasdaq dropped 1.6 per cent. Powell’s comments also pushed up yields