After a choppy start on Wall Street, Asian stocks dipped on Wednesday as investors rebalanced their holdings for the next year and struggled with rising Omicron coronavirus outbreaks around the world.
Following tumultuous U.S. trade, MSCI’s broadest index of Asia-Pacific shares beyond Japan (.MIAPJ0000PUS) fell 0.25 percent after multiple sessions of rising.
After reaching a one-month peak on Tuesday, Japan’s Nikkei (.N225) fell 0.58 percent on Wednesday.
Although the country’s most populated state, New South Wales, reported 11,201 more coronavirus cases, the ASX 200 (.AXJO) was up 1 percent early in the morning in Australia.
The end of December is a volatile period for markets, as investment managers prepare to close their accounts for the year and decrease trading volumes in some large markets, such as Australia.
Jim McCafferty, Nomura’s joint head of APAC stock research, said that the global investors are starting to reassess their portfolio positions at this time of year, and they’re looking at the risks heading into 2022.
According to McCafferty, people want to have their portfolios positioned to mitigate inflation in Europe and the United States, but it is more contained in Asia, so they are looking to have their portfolios positioned to mitigate inflation in Asia. People are searching for companies that can pass on future price increases and companies that have growing dividends as a strategy to produce income in shares.
The rising Omicron case numbers aren’t frightening investors as much as they might have been, given that death rates haven’t risen dramatically and the likelihood of global lockdowns remains remote.
On Tuesday, the Dow Jones Industrial Average (.DJI) gained 0.26 percent. During the session, the S&P 500 (.SPX) achieved a new intraday high, but then fell 0.10 percent to conclude the day. The Nasdaq Composite Index (.IXIC) fell 0.56 percent today.
In the United States, the return on benchmark 10-year Treasury bonds was 1.4773 percent, opposed to 1.481 percent on Tuesday. The two-year return hit 0.7461 percent after hitting 0.758 percent the previous session, a near two-year high.
The dollar rose modestly in early Asian trade on Wednesday as a recent stock market boom appeared to be fading, but holiday-thinned trading left markets with little direction.
The euro slid 0.14 percent tuesday to $1.1307, whereas the pound dropped from a five-week peak, boosting the dollar index to 96.164 from 95.957 on Friday.
The Federal Reserve is largely expected to raise rates ahead of several other major central banks, including the European Central Bank, and this has supported the dollar index have its finest year since 2015.
Crude oil in the United States rose 0.25 percent to $76.17 per barrel. The price of Brent crude has risen to $79 per barrel.
The price of gold was marginally lower. Gold was trading at $1,804.5631 per ounce on the spot market.