Asian Stocks Hold Strong In A Solid Start To 2022

January 14, 2022

Asian stocks have joined Wall Street in defying the Omicron Covid-19 fears to post a sterling start to the 2022 financial trade year. Even though the virus had seemed to halt the current global economic recovery, the global stock markets posted positive results to start the year.

The US and the European markets are also on the verge of opening up with S&P 500 index E-mini futures gaining 0.25% and FTSE futures trading 0.98% higher.

Japan’s Nikkei 225 rose by 1.78% while Australia’s S&P/ASX 200 gained 2.01% with the mining and metals stocks trading at the highest values in four months.

According to the Mizuho bank, the markets at the start of 2022 are less concerned about the Omicron variant. Instead, they are focusing on the Fed rate hikes that led to the high UST yields and steadied the USD.

China, however, had a slow start to the year. Hong Kong’s Hang Seng Index (HSI) initially fell by 0.36% before it regained through the afternoon session. Hong Kong’s tech index (HSTECH) slipped 1.44% and China’s benchmark CSI300 Index (.CSI300) lost 0.68%.

The China losses follow the introduction of new Cybersecurity laws that strengthens the oversight on companies.

What To Expect As The Year Progresses

Even though some major markets like Japan, Australia and China were closed, the start of the year among the other markets shows what to expect.

The major gains on the Asian stocks and the other markets are not only due to the New Year prospects. Instead, it is a long term sustained global market recovery.

There are indications of positive numbers following the economic reopening in the fourth quarter. The booming conditions and a tight labour market will mean an upturn in household incomes.

Following the sustained upturn in industry activities in Asia from December, the effects will be felt more from the start of 2022. Even though the supply chain constraints remain, the economy is opening up more hence more business activities.

While the solid start to the year seems long term, the traders are following on the state of inflation and possible Fed reactions.