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Asia: Stocks drop as Topix fluctuates while energy shares slide

Wednesday, February 17, 2016 - 08:44
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[SYDNEY] Asian stocks declined as Japanese shares fluctuated while energy shares tracked a slide in oil prices.

The MSCI Asia Pacific Index lost 0.3 per cent to 118.33 as of 9:20 am in Tokyo. Global shares rallied the past three days after more than US$8 trillion was wiped from the value of equities since the start of the year amid concern growth in the world's largest economies is weaker than forecast.

Crude retreated amid bets that a pledge by the two biggest oil producing nations to freeze output won't succeed in tackling the global surplus.

"Stay cautious," Mark Lister, head of private wealth research at Craigs Investment Partners in Wellington, which manages about US$7.2 billion, said by phone.

"Don't be afraid to reduce risk because we expect things to be volatile from here - it's a relatively defensive message. There are a lot of economic issues that need to be worked through. We've been incrementally paring back risk positions, including equities," he said.

The Topix index rose 0.1 per cent, after gaining as much as 0.7 per cent earlier. Japanese stocks are coming off the best two-day rally since 2008, including an eight per cent surge on Monday, amid speculation this year's global selloff was overdone and as confidence grew that central banks will do whatever is necessary to support markets.

The yen traded at 114.08 after climbing 0.5 per cent Tuesday as the agreement between Saudi Arabia and Russia weighed on oil prices, sending investors toward haven assets.

Australia's S&P/ASX 200 Index slipped 0.3 per cent and New Zealand's S&P/NZX 50 Index advanced 0.4 per cent. South Korea's Kospi index fell 0.2 per cent.

Woodside Slumps Woodside Petroleum Ltd, Australia's second-largest oil and natural gas producer, declined 5.3 per cent in Sydney after saying full-year profit declined 99 per cent as the rout in energy prices forced the company to write down the value of its assets.

Saudi Arabia and Russia agreed to freeze oil output at near-record levels, the first coordinated move by the producers to counter a slump that has pummeled economies, markets and companies.

Oil slipped below US$30 a barrel after the accord was announced, signaling traders see no immediate end to the global supply glut.

West Texas Intermediate crude rose 0.6 per cent after falling 1.4 per cent Tuesday.

Futures on the FTSE China A50 Index slid 0.2 per cent and contracts on the Hang Seng Index declined 0.7 per cent, while those on the Hang Seng China Enterprises Index retreated 0.9 per cent. China stocks rallied 3.3 per cent Tuesday, the most in three months, after data showed the nation's banks doled out a record amount of loans in January.

Futures on the Standard & Poor's 500 Index added 0.1 per cent after the underlying gauge rose 1.7 per cent Monday, capping the best gain in five months as the market caught up with a global rally following a holiday on Monday.

BLOOMBERG