Emerging markets-Asian stocks eke out gains as Omicron concerns ease
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South Korean stocks led gains among emerging markets on Friday as investor concerns over the Omicron coronavirus variant abated slightly, although regional currencies were subdued after more hawkish remarks from U.S. central bankers.

Scientists in South Africa, where the mutation was first discovered last month, said symptoms for vaccinated infected patients appeared to be mild, while a handful of U.S. Omicron cases identified also displayed moderate symptoms.  

Shanghai, Singapore and South Korea stocks rose between 0.4% to 0.9%. However, gains were capped by concerns over relations between Beijing and Washington after Chinese ride-hailing giant Didi said it would de-list in New York. "Risk sentiment recovered overnight with virus and vaccine news flow being net-positive," National Australia Bank (NAB) Research analysts wrote in a note. However, volatility is expected to persist as it will take at least two weeks to assess the severity of the Omicron variant and the efficacy of vaccines, NAB added. Philippine shares pared early gains to rise 0.3%.  

Owing to the sharp declines earlier this week, the index is set to lose around 3%, its biggest weekly decline since Oct. 29. The South Korean won eased 0.3% after firming for four straight days. In a week where Asian currencies underperformed, the unit is headed for gains of around 1% due to recent positive economic data that has fuelled rate-hike bets.  

The Indonesian rupiah slipped 0.2%, while most of its peers traded flat as the greenback found support ahead of a crucial payrolls report that could nudge the Federal Reserve to make earlier interest rate hikes.  

Two more Fed officials joined chair Jerome Powell in striking a hawkish tone overnight, with San Francisco Fed President Mary Daly saying it may be time to "start crafting a plan" to raise rates to combat inflation.

Next week will see the Reserve Bank of India meet for a policy review, where Barclays analysts expect it to take a step towards policy tightening by raising the reverse repo rate. That should bode well for the rupee, which is eyeing its second week of losses, down 1% over the period.

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