Japan stocks set for positive start as sentiment lifts following omicron variant fears

SINGAPORE — Shares in Japan looked set for a positive Wednesday start following big overnight gains on Wall Street as investors reassessed the impact of the omicron Covid variant.

The Nikkei futures contract in Chicago was at 28,690 while its counterpart in Osaka was at 28,640. That compared against the Nikkei 225's last close at 28,517.59.

In Australia, the S&P/ASX 200 climbed 0.1% in morning trade.

Overnight stateside, the Dow Jones Industrial Average surged 560.54 points to 35,492.70 while the S&P 500 gained 1.78% to 4,649.23. The Nasdaq Composite jumped 2.4% to 15,341.09.

"Mostly positive Omicron news have helped lift sentiment with South Africa reporting a slump in daily infections to the lowest in two weeks," said Rodrigo Catril, a currency strategist at National Australia Bank.

"Omicron news are lifting sentiment, encouraging markets to price a less malicious outcome from the new virus wave. Omicron is and will continue to have an impact on the global economy, but now there is prospect that its impact could be shorter and shallower," Catril said.

Investors will monitor the Turkish lira on Wednesday following its recent wild swings after the country's president announced a plan to support the currency and protect local deposits against market moves.

The lira was last trading at 12.2984 per dollar, much stronger than the record low seen earlier this week when the currency was above the 18 level against the greenback.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.478 — above levels below 94 seen late last week.

The Japanese yen traded at 113.95 per dollar following a recent weakening from levels below 113.7 against the greenback. The Australian dollar was at $0.7148 after climbing from below 0.712 earlier this week.

— CNBC's Natasha Turak contributed to this report.