Asian Stocks Dip on Omicron Fears

Asian stocks limped along in weak trading, fueled by fears over the Omicron variant. Meanwhile edgy investors, expecting a raft of central bank decisions this week, held back on trading.

Hong Kong's Hang Seng Index slid by 1%, South Korea's KOSPI was 0.4% lower, and Japan's Nikkei stock index fell 0.13%. China’s CSI300 index ended Tuesday’s trading 0.41% lower, following the first reported Omicron case in the Tianjin industrial province. Zhejiang, another major Chinese manufacturing province, suspended business in certain areas and placed tens of thousands of people in quarantine.

The European Central Bank, the Bank of England, and the Bank of Japan are meeting this week, and each is expected to announce key monetary policy decisions.

UK Prime Minister Boris Johnson did nothing to reduce fears of the new Omicron variant by predicting a “tidal wave” of new cases. Analysts are split on whether central banks will try to institute policies aimed at protecting their economies directly against Omicron spending hesitancy.

What does this mean for me?

Mixed signals about the seriousness of the Omicron variant are driving fears that consumer spending will be affected over the all-important end-of-year holidays.

If authorities decide to re-introduce Coronavirus restrictions, trade will suffer as supply chains contract and consumers cannot visit stores.

News of Asia’s dip in trade shows the global economy’s interconnectedness. As a stock trader, no matter how diverse your portfolio, it is not immune to swings from major global events.