Asian stocks slip as crude heads south
Asian shares slipped on Thursday as a fragile recovery in volatile crude oil unravelled, reviving anxiety about the health of the global economy, and Chinese shares skidded.
MSCI’s broadest index of Asia-Pacific shares outside Japan gave up early gains and was down 0.2 percent.
Japan’s Nikkei stock index added about 0.5 percent as the yen moved away from its recent highs.
Sharp Corp shares jumped after its board decided to accept a takeover offer from Hon Hai Precision Industry Co, a source said, in what would be the largest acquisition by a foreign company in Japan’s insular technology sector.
Market players said investors have focused on Friday’s G-20 meeting in Shanghai as one potential catalyst for troubled, directionless markets.
“The IMF has suggested that members of the G-20 summit use the meeting as a means of discussing a coordinated policy response for what could otherwise be a crisis,” said Stefan Worrall, director of Japan equity sales at Credit Suisse in Tokyo.
“I think investors are closely watching the G-20 for any signs of a coordinated fiscal response.”
Chinese shares extended early losses, with the CSI300 index of the largest listed companies in Shanghai and Shenzhen down 3.4 percent, while the Shanghai Composite Index slumped 3.6 percent
The dollar added about 0.1 percent against its Japanese counterpart to 112.33 yen, well off a two-week low of 111.04 yen plumbed overnight.
The euro rose about 0.1 percent to $1.1021 after touching a three-week low of $1.0957 overnight.
The British pound steadied at $1.3930 after dropping to a seven-year low of $1.3878 in the previous session on heightened fears that a June 23 referendum could lead to a British exit from the European Union.
U.S. crude futures shed about 0.9 percent to $31.86 a barrel, after they gained nearly 1 percent overnight on government data showing gasoline demand rose more than 5 percent over the past four weeks compared with a year ago. That helped offset investors’ fears about record high crude inventories.
The sharp downturn in global oil prices has fed investor fears about slowing world growth, with broader concerns about China’s cooling economy adding to heightened anxiety and financial market volatility.
Brent crude for April delivery skidded 1.1 percent to $34.04 a barrel.
Wednesday’s recovery in crude oil prices helped drag Wall Street higher at the close, after lacklustre economic data weighed on sentiment for much of the session.
U.S. data showed the services sector contracted in early February for the first time since October 2013, suggesting a weakening of economic conditions beyond the troubled manufacturing and energy industries. Other data showed weakness in new U.S. single-family home sales, though the overall housing market recovery remains intact.
Spot gold erased early losses and rose about 0.4 percent to $1,234.50 an ounce, within site of a one-year high of $1,260.60 reached on Feb. 11.
[Source:- Reauters]