Asian markets rose on Tuesday following strong gains on Wall Street as investors bet a surge in Covid-19 cases due to the fast-spreading Omicron variant would not derail the economic recovery.

The highly mutated strain has fuelled a massive increase in cases across the globe, with countries reviving lockdowns, thousands of flights cancelled and cruise ships returning to port with infected passengers.

But there is a "belief that Omicron is going to be a nuisance but not a dire strait for the global economy -- at least not for long," said Briefing.com analyst Patrick O'Hare.

Wall Street enjoyed strong gains, with the S&P 500 powering ahead 1.4 percent to a second straight record on Monday while the Dow and Nasdaq added at least one percent.

It was the start of a historically strong seven-day post-Christmas stretch known on trading floors as the "Santa Claus rally": a period of low trading volumes and light news flow that usually sees stocks drift higher.

The optimistic risk-on appetite carried over to Asia, with Tokyo leading the charge to close 1.4 percent higher while Singapore, Seoul, Jakarta and Kuala Lumpur were all well into positive territory.

Taipei, one of the top performers this year, added 0.8 percent. Sydney and New Zealand were still closed for the holiday break.

"Investors were comfortably buying back shares after watching US rallies," said Yoshihiro Okumura of Chibagin Asset Management.

"Although investors are concerned about Omicron, they are also expecting an economic recovery next year," Okumura told AFP.

Shanghai recovered from early losses to end 0.4 percent higher while Hong Kong closed up 0.2 percent in a see-saw session as Macau casino stocks fell sharply after the gaming enclave reported its first Omicron case.

European markets also followed Wall Street's lead with Frankfurt and Paris both up 0.2 percent in opening trade. London was closed for a holiday.

Oil futures rose in Asia, with benchmark WTI heading towards $76 and Brent closing in on $79 a barrel.

- Key figures around 0830 GMT -

Tokyo - Nikkei 225: UP 1.4 percent at 29,069.16 (close)

Hong Kong - Hang Seng Index: UP 0.2 percent at 23,280.56 (close)

Shanghai - Composite: UP 0.4 percent at 3,630.11 (close)

Frankfurt - DAX: UP 0.2 percent at 15,868.47

Euro/dollar: DOWN at $1.1321 from $1.1329 late on Monday

Pound/dollar: DOWN at $1.3437 from $1.3440

Euro/pound: FLAT at 84.26 pence from 84.26 pence

Dollar/yen: DOWN at 114.85 yen from 114.88 yen

West Texas Intermediate: UP 0.4 percent at $75.84 per barrel

Brent North Sea crude: UP 0.2 percent at $78.76 per barrel

New York - Dow: UP 1.0 percent at 36,302.38 (close)

London - FTSE 100: FLAT at 7,372.10 points (Friday close)

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Most Asian markets build on rally but Omicron casts shadow
Hong Kong (AFP) Dec 22, 2021
Most Asian markets rose Wednesday, extending a global rally after their latest sell-off as investors assess the impact of the fast-spreading Omicron variant. The year-and-a-half-long rally across markets has petered out in recent weeks on fears about the new Covid variant and government measures to contain it, which come just as central banks begin to remove the vast financial support put in place at the start of the pandemic. Traders are also keeping an eye on developments in Washington after J ... read more