Nikkei, Topix and Co. Asia stock exchanges gain – but the relief rally could be short-lived

Nikkei, Topix and Co. Asia stock exchanges gain – but the relief rally could be short-lived

Nikkei, Topix and Co. Asia stock exchanges gain - but the relief rally could be short-lived
The markets are currently reacting sensitively to every little piece of news related to Omikron.  Source: Reuters

Asian stocks expanded their gains on Wednesday as trading continued and continued the global relief rally. In the absence of any negative news about the Omicron virus variant, investors breathed a sigh of relief.

“The markets are very sensitive to every bit of news related to Omikron, and the lack of bad news is received very positively by the stock markets, although – and I am no scientist – it seems too early to give the all-clear,” said Stefan Hofer, investment strategist at the private bank LGT.

The markets are also focusing on the consumer price index data in the coming Friday. A high value is likely to prompt monetary policymakers to reduce the Federal Reserve’s massive bond-buying program more quickly.

“The relief rally could be short-lived if US data on Friday showed that high inflation is persistent or persistent – choose a word that doesn’t mean ‘temporary’,” Hofer said.

Japan’s economy contracted more sharply than previously assumed in the third quarter, given weak domestic and international demand. Compared to the previous quarter, the gross domestic product (GDP) fell by 0.9 percent from July to September, as the government announced on Wednesday based on revised data. The official statisticians had previously calculated a decrease of 0.8 percent. Extrapolated to the year (annualized), GDP declined by 3.6 instead of 3.0 percent.

According to the figures, the decline is mainly due to the continued weak demand from private households due to the corona and lower exports. According to the revised data, private consumption, which accounts for more than half of the country’s economic output, fell by 1.3 percent instead of 1.1 percent as previously thought.

The Nikkei index, which comprises 225 values, was a good one percent higher at 28,817 points. The broader Topix index rose 0.6 percent.

The Shanghai stock exchange was 0.8 percent up. The index of the most important companies in Shanghai and Shenzen gained a good one percent.

Shares in construction company Kaisa suspended

In China, the crisis in the real estate sector is worsening. Trading in shares of the ailing Chinese construction company Kaisa has been suspended, the Hong Kong Stock Exchange announced on Wednesday. The trading interruption came after an insider with direct knowledge of the matter said it was unlikely that Kaisa could meet a deadline of $ 400 million to settle debt.

According to insiders, Kaisa’s rival China Evergrande was also unable to make payments for some US dollar bonds after a one-month grace period on Tuesday, media reports said on Tuesday. This threatens a massive default of the world’s most heavily indebted real estate developer. Investors fear that a bankruptcy could trigger a conflagration and destabilize the entire Chinese financial market.

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