Asian equity and oil traders were sent running Tuesday after the head of Moderna warned current coronavirus vaccines might be less effective at fending off the Omicron variant, fuelling fears that countries could be forced back into economically painful lockdowns.

Stocks had mostly been edging up after a two-day sell-off that followed news Friday of the new variant, which some observers said was overdone as billions of people have been inoculated.

But Stephane Bancel's comments in an interview with the Financial Times sent shivers through markets again, as he said the high amount of mutations on Omicron and its swift spread in South Africa indicated the present jabs would need to be tweaked.

"There is no world, I think, where (the effectiveness) is the same level . . . we had with Delta," he told the newspaper.

Tokyo's Nikkei, which had been in positive territory through much of the day, ended more than one percent down, and Hong Kong extended losses. Seoul sank more than two percent and Singapore dropped more than one percent. Jakarta was also down and futures in New York were sharply lower.

Sydney, Wellington and Taipei closed higher before the interview was published.

The selling also spread to oil markets where both main contracts plunged more than three percent, after slowly recovering from Friday's collapse of more than 10 percent as demand fears came flooding back.

Tourism-linked firms were among the worst hit with Cathay Pacific losing more than four percent in Hong Kong -- having already been impacted by new restrictions on travel to the city -- and Singapore Airlines off more than one percent.

"Information on the Omicron variant is sketchy, how drastic its symptoms will be and how easily it can spread is also unknown, as is the effectiveness of current vaccines," said Kelvin Wong at CMC Markets.

"I expect more downside risk for the next couple of weeks unless there's more clarity on the Omicron strain."

- Uncertainty -

Bancel's remarks come after major firms said they were already working on a jab specific to the new strain.

Pfizer chief Albert Bourla said testing could show existing shots "protect less", which would mean "that we need to create a new vaccine" but added that he did not think the "result will be the vaccines don't protect".

There remains a lot of uncertainty among traders, and experts said it would take weeks before the full effects of the variant are known. The World Health Organization warned it poses a "very high" risk globally.

Investors have suffered a tough few months as they navigate the impact of surging inflation and the prospect of central banks withdrawing the ultra-loose monetary policies put in place at the start of the pandemic.

US Federal Reserve boss Jerome Powell warned the latest emergency posed "downside risks to employment and economic activity, and increased uncertainty for inflation".

In prepared comments ahead of an appearance in front of the Senate Banking Committee later Tuesday, he also said the virus could "intensify supply-chain disruptions" that have been a major cause of the inflation spike this year.

Oil traders kept tabs on OPEC and other key producers, who are due to decide on whether to press on with their plan to lift output each month in light of the new travel restrictions and the threat of Omicron.

The group had already been contemplating a pause after the United States and several other countries including China and Japan released some crude from their reserves to temper a price surge.

Carsten Fritsch of Commerzbank said "there is much to suggest that OPEC+ will not initially step up its oil production any further" in an effort to maintain current prices at around $70 a barrel.

Howie Lee of Oversea-Chinese Banking Corp said if OPEC+ "do pause, it will provide another reason for oil to find a firmer footing".

- Key figures around 0710 GMT -

Tokyo - Nikkei 225: DOWN 1.6 percent at 27,821.76 (close)

Hong Kong - Hang Seng Index: DOWN 1.9 percent at 23,393.74

Shanghai - Composite: FLAT at 3,563.89 (close)

West Texas Intermediate: DOWN 3.5 percent at $67.51 per barrel

Brent North Sea crude: DOWN 3.6 percent at $70.80 per barrel

Dollar/yen: DOWN at 113.16 yen from 113.58 yen at 2040 GMT

Pound/dollar: UP at $1.3322 from $1.3310

Euro/dollar: UP at $1.1322 from $1.1291

Euro/pound: UP at 84.98 pence from 84.80 pence

New York - Dow: UP 0.7 percent at 35,135.94 (close)

London - FTSE 100: UP 0.9 percent at 7,109.95 (close)

dan/qan

OCBC - OVERSEA-CHINESE BANKING CORPORATION

Related Links
Global Trade News

Tweet

Thanks for being here; We need your help. The SpaceDaily news network continues to grow but revenues have never been harder to maintain. With the rise of Ad Blockers, and Facebook - our traditional revenue sources via quality network advertising continues to decline. And unlike so many other news sites, we don't have a paywall - with those annoying usernames and passwords. Our news coverage takes time and effort to publish 365 days a year. If you find our news sites informative and useful then please consider becoming a regular supporter or for now make a one off contribution.
SpaceDaily Contributor $5 Billed Once credit card or paypal		SpaceDaily Monthly Supporter $5 Billed Monthly paypal only

Asian markets fall again but Europe, crude rebound from virus rout
Hong Kong (AFP) Nov 29, 2021
Asian markets fell again Monday after last week's painful rout fuelled by news of the Omicron virus strain but European stocks and oil rebounded strongly as investors try to assess its threat to the global economic recovery. Equities around the world went into freefall Friday on news of the heavily mutated variant, which some fear could evade vaccines, as it forced several governments to throw up flight bans from southern Africa where it was discovered and introduced fresh containment measures. ... read more