You are here

Asia: Markets down, oil slide hits energy firms

Hang Seng.jpg

[HONG KONG] Most Asian markets slipped on Thursday, with energy shares hit by a plunge in oil prices, while investors await Britain's election result and testimony from fired FBI boss James Comey on his probe into the Trump administration's Russia links.

Traders are on tenterhooks ahead of the big events, which could either fuel a sharp sell-off or reignite a rally that has seen some indexes hit multi-year - and even all-time - highs in recent weeks.

Crude prices sank more than five percent Wednesday after data showed an unexpected rise in US stockpiles, including gasoline, a particularly troubling sign for demand as the country's summer driving season kicks in.

The reading overshadowed an agreement last month by Opec and Russia to extend a production cut in order to address an ongoing supply glut that is weighing on prices.

sentifi.com

Market voices on:

"Any chat of more Opec cuts is likely to fall on deaf ears should they be made because the point of the cuts is to lead to a supply deficit," said Greg McKenna, chief market strategist at AxiTrader.

While both main contracts edged up in Asian trade, energy firms were still feeling the effects of Thursday's slide.

Woodside Petroleum fell two per cent in Sydney while Hong Kong-listed CNOOC shed 0.7 per cent. Inpex was down 0.6 per cent in Tokyo.

The main focus is on Mr Comey's evidence to a congressional committee, which could be damaging to Mr Trump.

In written testimony released Wednesday, Mr Comey said the tycoon urged him to drop a probe into former national security advisor Michael Flynn and his contacts with Russia, confirming news reports.

'SMOKING GUN'

US stocks did not react to the testimony, which also expressed the fired FBI chief's profound discomfort with Mr Trump's behaviour.

However, US markets were unfazed by the letter, which Stephen Innes, senior trader at OANDA, said "offered no smoking gun or impeachment-worthy bombshells and only repeated what the market had already known".

In Asian trade, Tokyo ended the morning 0.1 per cent higher with dealers brushing off news that the Japanese economy grew at a slower rate than first thought in January-March.

But Hong Kong lost 0.1 per cent and Sydney gave up 0.2 per cent while Seoul was off 0.4 per cent. Shanghai eased 0.1 per cent ahead of the release of Chinese trade data later in the day. Singapore and Wellington also dipped.

In Britain Prime, Minister Theresa May's Conservatives are expected to win the national vote, but their once commanding lead in opinion polls has been slashed since she called it, leading to fears of political uncertainty ahead of key Brexit talks.

However, the pound remains buoyant on expectations of a Conservative win, with analysts predicting it could jump to US$1.32 if Mrs May wins a comfortable majority. It is currently at US$1.2961.

The euro was struggling on speculation the European Central Bank would lower its eurozone inflation forecasts through to 2019, leading to worries it would stick to its loose monetary policy.

The single currency had been rallying on hopes the lender, which holds a meeting Thursday, would begin to tighten monetary policy as the bloc's economy picks up.

AFP

Powered by GET.comGetCom