Asian stocks mostly lower, eyeing Fed, China omicron cases

Asian shares have mostly declined in cautious trading following a retreat on Wall Street

TOKYO -- Asian shares mostly declined in cautious trading Tuesday following a retreat on Wall Street.

Investors are keeping an eye on rising numbers of coronavirus cases, especially in China, where a third city has locked down its residents because of a COVID-19 outbreak, raising the number confined to their homes in China to about 20 million people.

Such disruptions can have region-wide implications for trade and other activity. Major companies, including automakers such as Toyota, had been counting on a recovery in the supply of semiconductor chips and other products from China and the rest of Asia, as vaccinations and other coronavirus prevention efforts has advanced. The recent surge in infections by the omicron variant of coronavirus has shaken such hopes.

“China continues to grapple with an uptick in COVID-19 cases, with restriction measures kicking in to contain spreads before the Winter Olympics in February. While it may still be too early to say, the risks on watch may be from any disruptions in supply chains aggravating pricing pressures or a shift in China’s zero-COVID approach,” said Yeap Jun Rong, market strategist at IG in Singapore.