Asia report: Markets higher as China locks down its 10th-largest city

Markets in Asia closed in positive territory on Thursday, as investors continued to monitor the Omicron situation in the region, with technology plays in Hong Kong in particular focus.

In Japan, the Nikkei 225 was up 0.83% at 28,798.37, as the yen weakened 0.19% against the dollar to last trade at JPY 114.32.

Uniqlo owner Fast Retailing was down 0.15%, while among the benchmark’s other major components, robotics specialist Fanuc was up 0.35% and technology giant SoftBank Group was 0.39% higher.

The broader Topix index was 0.91% firmer by the end of trading in Tokyo, closing at 1,989.43.

On the mainland, the Shanghai Composite was 0.57% higher at 3,643.34, and the smaller, technology-centric Shenzhen Composite was ahead 0.18% at 2,524.74.

Market watchers were watching developments in the People’s Republic, after authorities put the country’s 10th largest city Xi’an into lockdown.

The 13 million residents of the metropolitan area in central China were ordered to stay at home as local officials worked to put a lid on growing numbers of Covid-19 cases locally.

South Korea’s Kospi rose 0.46% to 2,998.17, while the Hang Seng Index in Hong Kong managed gains of 0.4% to 23,193.64.

Chinese e-commerce company JD tumbled 7.02% in the special administrative region, while its peer in the tech sector Tencent jumped 4.24%.

Those moves came after Tencent announced it would distribute most of the JD shares it owns to its shareholders, in a transaction worth HKD 127.7bn (£12.21bn).

The blue-chip technology stocks were higher in Seoul, with Samsung Electronics up 0.63% and SK Hynix rising 0.39%.

“Historically, December is characterised by lower volatility,” said AvaTrade chief market analyst Naeem Aslam of the global situation on Thursday.

“We are living in an unusual period in which updates regarding the coronavirus cause large waves in stock markets and significantly affect investors' risk appetite.

“However, the recent rise in stock market indices indicates that stock traders, too, are confident that the United States will likely get through the Omicron variant without major consequences.”

Oil prices were lower as the region went to bed, with Brent crude last down 0.17% at $75.16 per barrel, and West Texas Intermediate losing 0.23% to $72.59.

In Australia, the S&P/ASX 200 was 0.32% firmer at 7,387.60, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was the region’s odd one out, slipping 0.02% to 12,862.71.

The down under dollars were stronger on the greenback, with the Aussie last ahead 0.35% at AUD 1.3814, and the Kiwi advancing 0.32% to last trade at NZD 1.4635.