Asian stocks were mostly flat on Thursday in cautious trade following a mixed close on Wall Street and ahead of year-end holidays. Fears of the Omicron coronavirus variant also weighed on markets, with the United States hitting its highest-ever average of new Covid-19 cases and the World Health Organization warning that a “tsunami” of infections would push health systems to the brink of collapse. But investors have also clung to data showing a reduced risk of hospitalisation, as well as the reality that trading volumes are extremely low in the period between Christmas and New Year. “Despite global surges in Covid-19 cases, the markets are reflecting the new reality that Covid-19 is here to stay albeit more on our terms than its,” Kevin Philip, managing director at Bel Air Investment Advisors, said in an email. Next year, “we are facing less of a Covid-influenced world, and a return toward normalcy,” he added. Tokyo was marginally down in early trade, while Hong Kong was slightly up. Shanghai was up by about one percent. Among stocks bucking the trend was Chinese artificial intelligence start-up SenseTime, which jumped by more than 10 percent on its Hong Kong debut, a week after it was blacklisted by the United States over accusations of genocide in Xinjiang. “Ahead of year-end and New Year holidays, the number of market participants is low and trade will likely remain lethargic,” Mizuho Securities said. “The markets continue to reassess the economic impact of the Omicron variant,” analysts at Schwab said in a note. “With market activity much reduced for the holiday season, investors continue to tentatively price in a global recovery hitting a minor bump, and not a pothole,” said Jeffrey Halley, senior market analyst at OANDA trading group. “It’s a positive drift in a thinly traded market,” said Briefing.com analyst Patrick O’Hare. “There’s really no news driving the market today.” A day earlier, London’s FTSE 100 outshone other markets, rising 0.7 percent to hit a nearly two-year high as UK traders returned from a long holiday. But the traditional post-Christmas bullish mood waned in Asia and the eurozone, with markets there finishing lower. The picture was also mixed on Wall Street, where the Nasdaq retreated even as both the Dow and S&P 500 edged to fresh records.