Jitters over the Omicron COVID mutation continue to rock markets and a handful of ASX shares could represent the best place to seek shelter.
This is despite the fact that renewed social and border restrictions is likely to take the wind out of the S&P/ASX 200 Index (Index:^AXJO).
The more infectious Omicron variant has already hit our shores and it is only a matter of time before it surfaces in the US.
Should ASX investors fear new COVID outbreak?
We won't know for weeks if Omicron is resistant to current vaccines or how severe the new strain is. The good news is that we are unlikely to see a repeat of the previous harsh lockdowns that derail economic growth.
However, ASX share investors shouldn't be too quick to celebrate, according to Macquarie Group Ltd (ASX: MQG).
"We do not expect the same level of volatility seen at the start of the pandemic, as the world has already adapted to life in a pandemic," said the broker.
"But given central banks were tapering plus diminishing fiscal stimulus and generally already high asset prices, there is a risk equity market volatility is higher than during COVID waves over the last year."
ASX shares climbing the Omicron wall of worry
In other words, while the world is better prepared to deal with COVID mutations, central banks have run out of ammo to keep supporting risk assets.
Even before Omicron, ASX share investors were already fretting over surging cases in parts of Europe. Countries like Austria and Germany were reintroducing restrictions as winter gets into full swing to contain the outbreak.
But this isn't time to throw in the towel. Macquarie has identified the ASX shares that could be beneficiaries of COVID, particularly as US cases rise.
One COVID matrix to watch
"We calculated a COVID capture ratio as the ratio of relative returns when US COVID cases were decelerating in 2021 divided by returns when cases were accelerating," explained Macquarie.
"Like a Beta, this ratio indicates the sensitivity of relative performance to changes in COVID cases."
A ratio below 1 indicates an ASX share that is more likely to outperform when COVID infections rise. A figure above 1 indicates the opposite.
Best and worst ASX shares to shelter from Omicron
Among the large cap ASX shares, those with a ratio below 1 include the Goodman Group (ASX GMG) share price and Brambles Limited (ASX: BXB) share price.
Others in the same camp are the ASX Ltd (ASX: ASX) share price and Northern Star Resources Ltd (ASX: NST) share price – just to name a few.
On the flipside, the Omicron losers include the Woodside Petroleum Limited (ASX: WPL) share price, Nine Entertainment Co Holdings Ltd (ASX: NEC) share price and Vicinity Centres (ASX: VCX) share price.
Banks and financial shares are also among the losers. These include the Westpac Banking Corp (ASX: WBC) share price, Commonwealth Bank of Australia (ASX: CBA) share price, Virgin Money UK CDI (ASX: VUK) share price and AMP Ltd (ASX: AMP) share price.
