By Gina Lee

– Asia Pacific stocks were mostly down on Wednesday morning, thanks to the continuous impact from a megacap technology selloff that weighed on U.S. shares overnight.

Japan’s Nikkei 225 fell 0.96% by 9:26 PM ET (1:26 AM GMT) and South Korea’s KOSPI fell 0.93%.

In Australia, the ASX 200 jumped 1.04%, with markets re-opening after a holiday.

Hong Kong’s Hang Seng Index fell 0.77%.

China’s Shanghai Composite was down 0.45% and the Shenzhen  Component was down 0.44%.

U.S. shares closed on an upward trend, however, in a sign that they could claw back some of the previous session’s losses. U.S. Treasuries saw little change.

A U.S. index of Chinese shares also fell as regulatory tightening of overseas share sales and the economic risks from a property slowdown weight on investor sentiment. However, the People’s Bank of China is expected to add more stimulus to boost the economic recovery in 2022.

Investors took advantage of a 17% jump in global equities to lock in some profits as the year draws to an end. But central banks’ monetary policy tightening, China’s outlook, and COVID-19 remain key risks in 2022, even as the evidence suggests that the omicron COVID-19 variant is milder than first thought.

“We are pretty constructive going into 2022... we’re having fits and starts related to this omicron of course. This will create maybe demand delayed but not destroyed,” Northern Trust (NASDAQ:NTRS) Wealth Management chief investment officer Katie Nixon told Bloomberg.

Meanwhile, China will need much stronger policy action in 2022 to bolster growth and help reignite interest in emerging-market equities, which otherwise will remain one of the big uncertainties for investors, Nixon added.

Other investors also remained cautious as markets enter the last few days of trading in 2021 and even into 2022.

“We’re sober about potential headwinds that still could be coming, even the rest of this year, but early in 2022; the Fed is going to be raising rates, that will change things for the markets,” Allspring Global Investments head of active equity Ann Miletti told Bloomberg.

However, Miletti also struck a more positive note, saying, “we are also hopeful because as you look at a lot of the economic data, it remains strong.”

On the data front, investors await the U.S. initial jobless claims figure, due on Thursday.