SINGAPORE (REUTERS) - Asian stocks edged higher on Tuesday (Dec 7) on receding worries about the impact of the Omicron variant while Chinese markets gained after the central bank there eased monetary policy.
MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.6 per cent after declining on Monday to the lowest level in one year.
The benchmark has lost 6 per cent so far this year, with Hong Kong markets figuring among the big losers, while Indian and Taiwanese stocks outperformed.
On Tuesday, Australia's S&P/ASX200 rose 0.5 per cent, while Japan's Nikkei advanced 1.1 per cent as risk-on sentiment pushed US stocks higher.
Singapore's Straits Times Index was up 0.3 per cent at 11.10am local time.
China's CSI300 index gained 0.7 per cent and Hong Kong's Hang Seng Index advanced 1.3 per cent as the central bank freed up US$188 billion in liquidity through a policy easing.
The People's Bank of China said on Monday it would cut the amount of cash that banks must hold in reserve, its second such move this year, releasing the funds in long-term liquidity to bolster slowing economic growth.
The world's second-largest economy, which staged an impressive rebound from last year's pandemic slump, has lost momentum in recent months as it grapples with a slowing manufacturing sector, debt problems in the property market and persistent Covid-19 outbreaks.
Monday's move acted as "a convenient, if not coincident, cushion for Evergrande's looming debt default", Mr Vishnu Varathan, head of economics and strategy at Mizuho Bank, said in a note.
Shares in embattled developer Evergrande rose 7 per cent after hitting a record low on Monday as markets awaited to see if the real estate giant has paid US$82.5 million coupons, with a 30-day grace period coming to an end.
Elsewhere, markets were supported by gains on Wall Street, where economically sensitive stocks outperformed.
"While epidemiologists have rightly warned against premature conclusions on Omicron, markets arguably surmised that last week's brutal sell-off ought to have been milder," Mr Varathan from Mizuho Bank said.
"After all, early assessments of Omicron cases have been declared mild, spurring half-full relief."
Omicron has spread to about a third of US states, but the Delta version accounts for the majority of Covid-19 infections in the United States, health officials said on Sunday.
Dr Anthony Fauci, the top US infectious disease official, told CNN it does not look like Omicron has a "great degree of severity".
Stocks on Wall Street closed a sea of green as value stocks, led by banks and energy shares, rose 1.5 per cent, compared with a 0.9 per cent gain in growth stocks.
The risk-on mood also helped the US dollar climb against safe haven currencies such as the Japanese yen,, which lost 0.6 per cent overnight, while the risk-friendly Australian dollar also found buyers.
Also supporting the dollar was the expectation that the Federal Reserve will accelerate the tapering of its bond-buying programme when it meets next week in response to a tightening labour market. It is also likely to hike rates earlier than projected to keep inflation down.
Oil prices ticked higher, consolidating a nearly 5 per cent rebound the day before as concerns about the impact of the Omicron variant on global fuel demand eased.
Brent crude futures rose 0.6 per cent to US$73.50 a barrel, after settling 4.6 per cent higher on Monday.
Gold prices were steady at US$1,779.5 per ounce on expectations US consumer price data due later this week will show inflation quickening.