The spread and impact of the Omicron variant raised questions about how the Stock market would look. Investors have rested their faith, causing the Asian market to outperform.
What varied was the percentage gain for every stock market and the method in which they rose. The Chinese stocks recovered from decline after the country’s central bank eased its monetary policy.
Asian Stock Market Sits Tight Amid Omicron Concerns
There was a dip recorded in the Asian stock market after the outbreak of the Omicron variant was announced. Markets have reportedly outperformed by bouncing back.
Momentum came rushing back to the Asian stock markets. This includes China that had to ease its monetary policy to recover from the decline.
After declining on December 06, 2021, Monday, the overall index of MSCI gained 0.6% despite the benchmark falling by 6%. The reference is true for every Asian market except that of Japan. Japan’s Nikkei moved forward by 1.1%.
The market that lost the maximum percentage in benchmark was Hong Kong, while the markets to outperform were Indian and Taiwanese.
China’s CSI300 gained 0.7%, and Hong Kong’s Hang Seng Index gained 1.3%. The increase could be achieved after the country’s People’s Bank of China announced to cut the reserves of cash for banks.
This means that all the banks would have to follow the guideline of lowering the amount of cash that they can hold in their reserves.
The move is aimed to free up the liquidity of $188 million. It has lowered the cash reserves for the second time in 2021. The lowering of cash reserves for banks was in response to the decline in the manufacturing sector and growing debt problems in the property market.
The continuous outbreaks of Covid-19 acted as an additional factor for the Central Bank to free up the liquidity.
Evergrande, a real estate company founded in 1996, has been in the news for a while. The reason is its growing debt which has already crossed the neck level.
Australia and the United States of America reflected a similar picture.
Australia’s S&P/ASX200 rose by 0.5%, along with the USA recording a growth of 1.5% with a gain of 0.9%.