HONG KONG (Reuters) -- Asian stocks were largely on the front foot on Tuesday following Wall Street's record highs on its first trading day of 2022, despite worries that the widespread Omicron COVID-19 variant could put the brakes on global economic recovery.
Europe and U.S. also look poised to open up yet again with FTSE futures gaining 0.98% and E-mini futures for the S&P 500 index 0.24% higher.
Australia's S&P/ASX 200 closed 2.01% higher with its metals and mining stocks hitting a 4-month peak. Japan's Nikkei 225 also widened morning gains to rise 1.78%.
MSCI's gauge of Asia Pacific stocks outside Japan advanced 0.4%.
"As we start 2022, markets seem to have retained memories of 2021 and put Omicron in the backdrop with focus on Fed rate hikes leading to higher UST yields and underpinning USD strength alongside continued buoyancy in equities," said Mizuho Bank in a Tuesday note.
Hong Kong's Hang Seng Index, however, fell 0.36% after China's cybersecurity watchdog announced official rules that will strengthen oversight over how its platform companies make plans to list abroad or use algorithms but recovered losses when the afternoon session started. Hong Kong's tech index lost 1.44% on the news.
China's benchmark CSI300 Index slipped 0.68%, dragged down by tech stocks.
Major Wall Street indexes scored record closing highs on Monday, even as the Omicron variant of the coronavirus pushed COVID-19 cases to fresh peaks in the world's largest economy.
"Markets are focusing more on the likely positive earnings numbers from U.S. in the fourth quarter. We are firmly of the view the U.S. is seeing boom conditions and a very tight labor market which will boost household incomes," said John Milroy, an Ord Minnett adviser in Sydney. He added that "investors are keeping a close watch on inflation and how the Fed may respond if it proves to be other than transitory."
The United States will release its employment data and purchasing managers' indexes (PMI) this week. China is due to announce its trade data on Friday.
"U.S. employment data will be the key indicator for assessing whether the Fed follows through with its planned rate increases in 2022," BlackRock said in a note on Tuesday.
"A series of Purchasing Managers' Indexes should give investors a read on the momentum of the restart. China's trade data will give an indication of whether supply bottlenecks that have pushed up inflation are resolving," it said.
In Asia, factory activity grew in December as companies took rising global cases of the new Omicron coronavirus variant in stride, though persistent supply constraints and rising input costs clouded the outlook for some economies.
The Dow Jones Industrial Average rose 0.68%, the S&P 500 gained 0.64% and the Nasdaq Composite added 1.2%.
Apple on Monday became the first company to reach a $3 trillion stock market value while Tesla, rose more than 13.5% after reporting stronger-than-expected quarterly deliveries of its electric cars.
The S&P index surged nearly 28% last year, driving MSCI's 50-country index of world stocks to its third consecutive year of double-digit gains.
The benchmark U.S. 10-year yields hit a six-week high to yield 1.6384%, with investors expecting a series of interest rate raises this year to combat rising inflation.
The commodity markets were also quickly back in the swing of things after their nearly two-year resurgence to close out 2021.
Brent oil rose 0.47% to nearly $79.35 a barrel, building on Monday's gains, which were supported by tight supply and hopes of a further demand recovery in 2022, despite an expected further increase in output by OPEC+. U.S. crude was up 0.37% to $76.36 a barrel.
Gold prices rebounded after Monday's worst sell-off in six weeks as a risk-on rally in equities pressured bullion. Spot gold gained 0.18% to $1804.0 an ounce at 0519GMT.