Worldwide concern over omicron variant of the coronavirus 1:51
Hong Kong (CNN Business) -
Asia Pacific markets were down on Monday, as investors continued to absorb news of a new variant of covid-19.
As of 1:30 am ET on Monday, Japan's Nikkei 225 (N225) was down 1.6%, while Hong Kong's Hang Seng Index (HSI) was down 1.2%.
South Korea's Kospi (KOSPI) and Australia's S & P / ASX 200 were each down about 0.9% and 0.5%, respectively.
China's Shanghai Composite (SHCOMP) was flat.
A pedestrian walks past an electronic trading board displaying stock prices on the Tokyo Stock Exchange in Tokyo on November 29, 2021. (KAZUHIRO NOGI / AFP via Getty Images)
But in the United States, stock futures were pointing higher.
Dow futures, S&P 500 futures and Nasdaq futures each rose 0.5%, 0.8% and 1%, respectively.
Oil prices also showed a rebound.
Brent crude, the world's benchmark, rose more than 3% to about $ 75 a barrel, while US crude rose 4% to $ 71.
But analysts are still bracing for signs of how the omicron variant could endanger more lives, disrupt the global economy and continue to affect markets after a dramatic sell-off on Friday.
Fear of the unknown
The omicron variant of the coronavirus has prompted a new round of travel restrictions around the world and raised concerns about what could follow in the pandemic.
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On Friday, the World Health Organization (WHO) designated the strain as a "variant of concern" and said multiple studies were underway.
This was followed by an update from the organization on Sunday, which urged people to continue social distancing, wear masks and maintain hand hygiene.
"It is not yet clear whether omicron is more transmissible ... compared to other variants, including delta," the WHO said.
Ómicron, mu, delta, lambda and others: one by one, all the variants of the coronavirus identified so far
"[The] WHO is working with technical partners to understand the potential impact of this variant on our existing countermeasures, including vaccines."
In a note Saturday, Goldman Sachs' Nohshad Shah said it was too early for analysts to "jump to conclusions" at the moment.
"It should be emphasized that at this stage we have very little laboratory evidence and very little real-world data," he noted.
But "the [sell-off] after Friday's news of the new variant of concern was a reminder of the increased macro volatility in the current environment," wrote Shah, co-director of interest rate sales for Europe, the Middle East and Africa.
"The next two weeks could be very nervous for the markets."
In a report Sunday, Morgan Stanley economists said the emergence of the new strain posed "a short-term risk" to their outlook for Asia.
"However, with a much higher proportion of the vaccinated population, the risk of growth could be lower than that which occurred in mid-2021, as long as the variant is not more challenging than delta," they added, referring to the highly contagious variant that it was first detected earlier this year.
"To evaluate the impact of the omicron variant, we are looking for details on its transmissibility and impact on the efficacy of the vaccine, as well as on hospitalization and mortality rates."
Markets crashed
On Friday, stocks around the world fell as fear gripped global markets.
Oil prices plummeted more than 10%.
In the United States, the Dow (INDU) posted its worst day in more than a year, plummeting 905 points, or 2.5%.
The S&P 500 (SPX) also had its worst day since February, closing 2.3% lower.
For the Nasdaq Composite (COMP), it was the worst day since September.
The index ended 2.2% lower.
There was a shorter US trading session on Friday that ended around lunchtime, after markets closed on Thursday for Thanksgiving.
Traditionally, the mid-day session has a lower trading volume, which can exacerbate changes in the market.
Dan Ives, managing director of stock analysis at Wedbush Securities, wrote in a note over the weekend that his team saw Friday's slide "as a clear buying opportunity."
"Ultimately, this is not the first or last variance scare," he said.
"While the volatility and news flow surrounding this situation will make headlines, our technology [investing] playbook remains unchanged."
-— Anneken Tappe, Christina Maxouris and Laura He contributed to this report.
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