Published On: Mon, Mar 28th, 2016

Oil up; Asian markets down


SINGAPORE/HONG KONG: Oil prices edged up in Asia on Monday, recovering slightly from last week’s decline.

Hopes for an agreement between Russia, Saudi Arabia and other crude giants to at least freeze output sent both main contracts racing above $40 earlier this month, helped by a dive in the strength of the dollar.

However, some of those gains were chipped away last week as talk of a possible US interest rate rate lifted the dollar — making oil more expensive — and a report showed another jump in US crude stockpiles.

At around 0620 GMT US benchmark West Texas Intermediate was up 50 cents, or 1.27 percent, to $39.96. Brent was up 45 cents, or 1.11 percent, at $40.89.

Members of the Organization of the Petroleum Exporting Countries (OPEC) and key non-members led by Russia are due to discuss a proposed output freeze at a meeting in Doha on April 17.

Qatar’s energy minister Mohammed al-Sada, who also serves as OPEC president, earlier said the initiative was backed by 15 countries accounting for 73 percent of worldwide output.

Sanjeev Gupta, who heads the Asia-Pacific oil and gas practice at professional services firm EY, said traders would also be looking at upcoming US and Chinese economic data for direction.

Most Asia markets fall but Tokyo rallies with dollar

The dollar extended a recent recovery Monday and Japanese stocks climbed as a better-than-expected jump in US growth raised the prospect of another Federal Reserve rate hike, but Asia’s other markets succumbed to afternoon selling.

After the turmoil of January and February, investor confidence has been broadly positive over the past month thanks to a string of central banks easing measures across the world and improving economic figures.

On Friday the US Commerce Department said the world’s number one economy grew 1.4 percent in the final three months of 2015, much faster than the 1.0 percent initially recorded.

The increase came on the back of a surge in consumer spending, which was also much stronger than first thought.

The news ramped up expectations that the Federal Reserve will announce another hike in interest rates, providing some support to the dollar against the yen and euro.

In early trade Monday the greenback bought 113.53 yen compared with 113.00 yen on Friday.

The US unit had tumbled below 111 yen earlier this month after the Fed lowered its outlook for interest rate rises this year, citing the possible impact on the US of a slowdown in the world economy.

“We’re now more conscious that there’s strength in the US economy,” Yoshinori Ogawa, a market strategist at Okasan Securities, told Bloomberg News.

The weaker yen lifted Japanese exporters, helping the Nikkei 0.8 percent higher by the close.

Markets in Hong Kong, Australia and New Zealand were closed for the Easter break.

However, markets in the rest of Asia reversed morning gains to end lower. Seoul was 0.1 percent off and Taipei fell 0.2 percent, while Singapore, Manila and Jakarta were deep in negative territory.

Shanghai closed 0.7 percent lower, having started on a high after official figures this weekend showed profits at China’s key industrial companies rose almost five percent in January-February, the first increase since mid-2015.

Mainland Chinese shares have recovered 12 percent since hitting a January low. Investors are hoping for fresh measures from Beijing to kickstart the economy, which is growing at rates not seen for a quarter of a century.

Traders are now awaiting the release of closely watched manufacturing data at the end of the week, hoping for fresh signs of improvement in the Asian economic giant.

– Key figures around 0700 GMT –

Tokyo – Nikkei 225: UP 0.8 percent at 17,134.37 (close)

Shanghai – Composite: DOWN 0.7 percent at 2,957.82 (close)

Hong Kong – Hang Seng: Closed for public holiday

Euro/dollar: DOWN at $1.1163 from $1.1169 on Friday

Dollar/yen: UP at 113.53 yen from 113.00 yen

New York – Dow: UP: 0.1 percent at 17,515.73 (close)

London – FTSE 100: DOWN 1.5 percent at 6,106.48 (close) – AFP



About the Author

Syed Ammar Alavi

- is Lahore (Pakistan) based journalist & writer with 25-year experience in print, wire and broadcast forms of journalism. His major fields of interest are politics, film,tv,sports, climate change and technology