Global stocks falter as Didi delisting raises concerns of China in US

Stocks tumbled on Friday after Chinese giant Didi announced that it would be delisting in New York, sparking new concerns about tensions and tech regulations in China, while Omicron oil prices fell for the sixth straight week and fears of a rate hike were feared. 4,444 S&P 500 futures were down about 0.5%. Shares in Hong Kong’s Hang Seng fell 1.3% on the back of strong tech giants. Non-Japan MSCI Asian stocks were down 0.7%.

“This delisting is raising concerns in China about how it will affect the overall situation in the US,” said Moh Xiong Sim, an analyst at Bank of Singapore. The news of Didi comes a day after Singapore-based pickup and delivery company Grab dropped more than 20% in the launch of the largest Wall Street-listed company in Southeast Asia, NASDAQ.

More broadly, markets have pivoted to less extreme Omicron news this week, pushing the CBOE Volatility Index (.VIX) towards its biggest one-week gain since the tumultuous pandemic last month. February 2020. Short-term profits also spiked as investors bet on higher rates, even with Omicron uncertainty.

Traders will have to wait at least another week or so for an early reading of the variant’s virulence or vaccine resistance. US labor data, due out late Friday, is also the focus of attention as a guide to rates. The benchmark Brent crude oil price ended overnight higher  at $69.67 a barrel, but have fallen more than 3% this week and are down more than 18% from a three-year high since October.

So far, due to the lack of detailed information about Omicron, some governments have managed to close the border. But other policymakers, particularly the Federal Reserve, are moving cautiously at the pace of the plan away from the crisis regime’s responses.

The Fed did not ignore Omicron’s threat, but decided not to let it delay policy responses suggesting a business-as-usual view,” said Tobin Gorey, chief strategist at Commonwealth Bank of Australia. “OPEC+ did a similar thing,” he added. “Neither of them freezes their planned policy change and both are perhaps examples that suggest that containment responses to outbreaks are becoming less likely. The bond market’s reaction to Powell’s hawkish bias has been to raise short-term rates and lower long-term rates, believing that earlier rallies will ultimately reduce inflation and future growth, while flattening the US yield curve.

Yields on two-year Treasuries held steady across Asia’s first exchanges, up nearly 10 basis points on a weekly basis. Benchmark The 10-year Treasury yield is down nearly 6 basis points to 1, 4291% this week and the 30-year yield is down 7.3 basis points to 1, 7545%. For the first time in ages, the risk to this US economic cycle is that it will end sooner than expected by consensus projections. Investors sold riskier currencies on Friday. The risk-sensitive Australian and New Zealand dollars lose about 0.3 cents. The euro was steady at $1.1298 and the yen at 113.08 per dollar.