Asian markets rose on Thursday following Wall Street’s lead as concerns over inflation and COVID eased with US data showing optimism about the economy despite the spread of the Omicron variant.

The upbeat pre-holiday mood was helped by two preliminary studies from Britain indicating Omicron infections were less likely to result in hospitalisation compared with the Delta variant, confirming a trend first identified in South Africa.

The cautious optimism was also lifted by news that the US Food and Drug Administration had authorised Pfizer’s anti-COVID pill, providing fresh tools to battle the disease. New cases of the highly mutated Omicron strain continued to soar, but market watchers are becoming more confident the health effects will be milder than with earlier strains.

“Markets hate uncertainty and not knowing, and when Omicron hit the markets, we didn’t know,” Carol Schleif, deputy chief investment officer at BMO Family Office, told Bloomberg Television. “But it seems like it’s edging toward something more positive.”

Wall Street closed with healthy gains after US data showed consumers remained upbeat about the economy despite the rise of the fast-spreading Omicron strain. The Conference Board’s consumer confidence index jumped nearly four points to 115.8 compared to the prior month. Sentiment was also boosted by revised data from the US Commerce Department showing GDP expanded at a faster annual rate of 2.3 per cent in the third quarter, up from earlier estimates of 2.1 per cent.

The positive mood carried over into Asia on Thursday, with Tokyo adding 0.8 per cent to cheerlead the advance as regional markets climbed across the board. “The market remains generally optimistic, although there are concerns about the Omicron variant’s spread, particularly during the year-end and New Year season when people move around,” Okasan Online Securities said.

Even a COVID lockdown in the Chinese city of Xian failed to dampen enthusiasm, with Shanghai closing 0.6 per cent higher and Hong Kong up 0.3 per cent.

“A cocktail containing better US Q3 GDP data, along with positive Omicron headlines further inoculated financial markets against a year-end sell-off overnight,” said OANDA’s Jeffrey Halley. “It would take some huge downside misses from the US data dump this evening to unsettle what appears to be an inevitable Santa rally on Wall Street into the end of the week,” he added, ahead of the release of US jobless claims, personal spending and durable goods orders later Thursday.

A cocktail containing better US Q3 GDP data, along with positive Omicron headlines further inoculated financial markets against a year-end sell-off overnight- OANDA’s Jeffrey Halley

Oil also extended its gains after US crude stockpiles fell more than expected last week.