Market Update - 30 November 2021

Wall St bounced back from red Friday as investors enjoyed a day of solid gains. The major indexes closed higher, off from its best levels of the session. Tech stocks led while the price of oil and iron ore rallied amid concerns of the latest covid-19 variant emerging from South Africa. Market participants have been on a rollercoaster ride after the strain of Covid-19 surprised us, a reminder that the pandemic is not over. Leading into Winter, concerns that cases could rise amid this new strain certainly put markets into tears. We will learn over the coming weeks how deadly this strain is and the efficacy of the current vaccines.

Nerves were soothed after President Biden comforted markets that he had very little appetite to move back to the days of hard lockdowns. Meanwhile, Moderna said that they could have their Omicron vaccine as soon as early next year. The pharma giant is also looking to advance its booster shot to take into account this new strain. Shares closed 11.8 per cent higher. Citi downgraded antiviral Covid-19 pill-maker Merck to neutral from a buy after the drug maker shared results from the trial of their antiviral pill. The efficacy came in lower than expected with the broker noting that the lacklustre results meant that shares in vaccine pill makers are limited. This is the company that has agreed to a US$1.2 billion deal with the Whitehouse to supply the anti-covid pill and applied for emergency use authorisation with the FDA early last month.

Yesterday, the Australian sharemarket closed 0.5 per cent lower at 7,240 haunted by the new Covid-19 strain. Travel stocks got hit as new mobility restrictions to suppress the omicron variant were announced while materials and information technology shares bucked the trend as the only winners of the session, up 0.7 and 0.6 per cent respectively. Real estate and energy fared the worst while the other sectors closed lower. Meanwhile the news boosted pathology and imaging services provider Sonic Healthcare and Healius jumped over 2.5 per cent on expectations of increased revenue from Covid-19 testing.

Asian markets closed mostly lower as fears about Omicron spooked investors. Tokyo's Nikkei fell 1.6 per cent, Hong Kong's Hang Seng lost almost 1.0 per cent after casino stocks tumbled on arrest of 11 people including a major junket organiser on money laundering charges. China's Shanghai Composite closed flat, down 0.04 per cent or 1 point. Shares in casino operator MGM China tumbled 10 per cent.

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