SINGAPORE, Dec 7 (Reuters) - Asian shares staged a recovery
on Tuesday on receding worries about the impact of the Omicron
variant while Chinese markets were supported by the central bank
easing monetary policy.
MSCI's broadest index of Asia-Pacific shares outside Japan
advanced 1.3% and was on course for its biggest
jump in two months, after declining on Monday to the lowest
level in one year.
Euro Stoxx 50 futures rose 0.5% and FTSE futures
put on 0.08% in early trade, indicating a firm market
open after European stocks ended higher on Monday.
China's CSI300 index gained 0.6% and Hong Kong's
Hang Seng Index advanced 1.7% as the central bank freed
up $188 billion in liquidity through a policy easing.
"With this cut, policymakers are demonstrating a more
forceful approach to prevent an all-out property market rout,"
David Chao, global market strategist, Asia Pacific, ex-Japan, at
Invesco said in a note.
The People's Bank of China said on Monday it would cut the
amount of cash that banks must hold in reserve, its second such
move this year, releasing the funds in long-term liquidity to
bolster slowing economic growth.
China is in a mid-cycle slowdown and the RRR cut is exactly
what the economy needs to get back on track, said Chao. "It's
feasible that more RRR cuts are in store over the next year in
order to stabilize growth," he added.
Elsewhere, Australia's S&P/ASX200 rose 0.95%, while
Japan's Nikkei advanced 2.1% as risk-on sentiment pushed
MSCI's main Asia ex-Japan benchmark has lost about 5% so far
this year, with Hong Kong markets figuring among the big losers,
while Indian and Taiwanese stocks outperformed.
Shares in embattled developer Evergrande edged up
1.7% after hitting a record low on Monday as markets awaited to
see if the real estate giant has paid $82.5 million with a
30-day grace period coming to an end.
Elsewhere, markets were supported by gains on Wall Street,
where economically sensitive stocks outperformed.
"While epidemiologists have rightly warned against premature
conclusions on Omicron, markets arguably surmised that last
week's brutal sell-off ought to have been milder," Vishnu
Varathan, head of economics and strategy at Mizuho Bank, said in
"After all, early assessments of Omicron cases have been
declared mild, spurring half-full relief."
Omicron has spread to about a third of U.S. states, but the
Delta version accounts for the majority of COVID-19 infections
in the United States, health officials said on Sunday.
Dr. Anthony Fauci, the top U.S. infectious disease official,
told CNN it does not look like Omicron has a "great degree of
Stocks on Wall Street closed higher on Monday.
The risk-on mood also helped the dollar climb against safe
haven currencies such as the Japanese yen,, which lost
0.6% overnight, while the risk-friendly Australian dollar
also found buyers.
Also supporting the dollar was the expectation the Federal
Reserve will accelerate the tapering of its bond-buying program
when it meets next week in response to a tightening labour
Oil prices ticked higher, consolidating a nearly 5% rebound
the day before as concerns about the impact of the Omicron
variant on global fuel demand eased.
Brent crude futures strengthened 0.9% to $73.7 a
barrel, after settling 4.6% higher on Monday.
Gold prices were steady at $1,778.5 per ounce on
expectations U.S. consumer price data due later this week will
show inflation quickening.
(Reporting by Anshuman Daga; Editing by Sam Holmes and Lincoln