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Asia-Pacific stocks extend losses on Omicron uncertainties

By Mensholong Lepcha

06:25, 29 November 2021

Omicron, the latest Covid-19 variant, labelled on a lab test tube
Omicron, the latest Covid-19 variant – Photo: Shutterstock

Asia-Pacific markets extended losses on Monday, as fears of fresh lockdowns and border closures following the emergence of the latest Covid-19 variant turned investors risk-averse.

Hong Kong and Japan stocks fell over 1% each to lead losses in the region, while Australian stocks hit a near two-month low on Monday.

“So with very little known, markets this week will take their direction from headlines related to government responses and virology data rather than economic data,” said John Bromhead, Tom Kenny and Daniel Been of ANZ Research in a note.

Border restrictions in place

Governments across the globe have scrambled to close borders to travellers from high-risk nations. According to ASB Economics, Omicron, which originated in South Africa has been detected in the UK, the Netherlands, Hong Kong, Israel, Belgium and Australia.

“According to reports this morning, it will be another two weeks or so before BioNTech will have some more scientific evidence on the new omicron variant that will inform how governments around the world may react to this new omicron variant,” added Robert Carnell, regional head of research (Asia-Pacific) at ING.

HK50

16,398.40 Price
-1.580% 1D Chg, %
Long position overnight fee -0.0260%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 30.0

DE40

16,536.60 Price
+0.690% 1D Chg, %
Long position overnight fee -0.0221%
Short position overnight fee -0.0001%
Overnight fee time 22:00 (UTC)
Spread 1.5

US100

15,838.00 Price
+0.240% 1D Chg, %
Long position overnight fee -0.0263%
Short position overnight fee 0.0041%
Overnight fee time 22:00 (UTC)
Spread 1.8

US30

36,103.40 Price
-0.180% 1D Chg, %
Long position overnight fee -0.0263%
Short position overnight fee 0.0041%
Overnight fee time 22:00 (UTC)
Spread 2.2

On Monday, Australia’s benchmark S&P/ASX 200 index fell as much 1.3% to hit a near two-month low. However, gains in mining and tech stocks helped trim losses as the benchmark index closed 0.5% lower at 7,239.70 on Monday.  

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Japan shares hit over six-week low

Australian Prime Minister Scott Morrison on Monday said the island nation will review its plans to reopen borders, following the detection of two imported cases of the Omicron variant in Sydney.  

In Hong Kong, food delivery firm Meituan emerged as the top loser on Monday, down 7.7%. Hot-pot restaurant chain Haidilao International lost 2.7% on lockdown fears amid China’s zero-Covid tolerance policy.

In Tokyo, benchmark Nikkei 225 Index fell 1.7% to 28,262.42, its lowest close in over six weeks. Losses in Japan were broad-based with all 17 Topix sectoral indices in the red.

Read more: Gold shines amid growth worries caused by new variant

Markets in this article

AU200
Australia 200
7091.0 USD
3 +0.040%
AU200
Australia 200
7091.0 USD
3 +0.040%
AU200
Australia 200
7091.0 USD
3 +0.040%
AU200
Australia 200
7091.0 USD
3 +0.040%
AU200
Australia 200
7091.0 USD
3 +0.040%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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