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Oil heads to 6-year low, China data pares stock losses
[HONG KONG] Energy stocks took a hit in Asian trade on Tuesday as oil prices fell towards six-year lows with warnings of further volatility ahead but some rare upbeat Chinese trade data helped Hong Kong and Shanghai into positive territory.
Tokyo dived 1.74 per cent by the break as it played catch-up with global markets after a three-day weekend, while Sydney fell 0.65 per cent and Seoul lost 0.34 per cent.
However, Hong Kong added 0.52 per cent and Shanghai gained 0.26 per cent.
Crude sank again Monday after Wall Street investment titan Goldman Sachs slashed its price outlook for the commodity, adding to anxiety about a global oversupply, weak demand and soft growth in the key Chinese and European markets.
The warning sent US shares tumbling, with the Dow down 0.54 per cent, the S&P 500 off 0.81 per cent and the Nasdaq tumbling 0.84 per cent.
"There is no escaping crude's effect on global markets," Evan Lucas, a markets strategist in Melbourne at IG Ltd., said, according to Bloomberg News. "This will see first-half volatility ramping up throughout the globe." In early Asian exchanges oil prices continued their descent after Monday's pummelling.
Brent crude for February delivery fell 75 US cents to US$46.68 a barrel - its lowest level April 2009. On Monday it plunged more than five percent to end below US$50.
US benchmark West Texas Intermediate shed 73 US cents to US$45.34 - its weakest since March 2009 - a day after losing 4.7 per cent.
The weakness filtered through to Asian energy companies. In Sydney BHP Billiton lost 1.86 per cent and Woodside Petroleum fell 1.65 per cent, while CNOOC in Hong Kong was 1.13 per cent lower. Tokyo-listed Inpex shed 3.68 percent and Showa Shell gave up 3.43 percent.
Shanghai and Hong Kong reversed initial losses following the release of Chinese trade figures.
The General Administration of Customs said exports rose 9.9 per cent year-on-year in December, while imports fell 2.3 per cent. That resulted in an almost doubling of the country's trade surplus during the month.
On currency markets the yen edged up against the euro and dollar as increased uncertainty leads traders to look for safer investments.
The euro bought US$1.1838, compared with US$1.1834 in New York, while it was also at 139.69 yen against 139.98 yen.
The dollar fetched 117.92 yen, compared with 118.27 yen in US trade.
Gold was US$1,236.23 an ounce, compared with US$1,222.03 on Friday.