A Malek

2018-10-24 10:27:24 BdST

Asian markets suffer fresh losses, energy firms tank

Asian equities fell again Wednesday extending the previous day’s geopolitics-fuelled sell-off, with energy firms taking another battering in response to an oil market rout.

Investors around the world are fleeing riskier assets such as stocks and
high-yielding currencies in search of safety as wave of negative issues
dominate the news.

Stephen Innes, head of Asia-Pacific trading at OANDA, pointed to “a toxic
geopolitical cocktail of nagging concerns” from Chinese growth, stuttering
Brexit talks, Italy’s budget standoff with Brussels and the killing of Saudi
Arabian journalist Jamal Khashoggi.

He also highlighted that even US stocks — which have been supported in
recent months by a strong economy despite sharp losses elsewhere — are
feeling the strain.

“Significant for global equity investors, the US equities Teflon persona
was seriously questioned as price action suggested there is one asset class
investors fear: equities,” he warned in a note.

“And like migratory birds heading south for winter, the icy chill
enveloping global stock markets has sent investors flocking to safe to haven
Despite an afternoon bounce, Wall Street’s three main indexes ended with
losses following a mixed round of earnings.

And the selling continued in Asia.

Hong Kong, which dived more than three percent Tuesday, lost 0.2 percent,
while Shanghai slipped 0.5 percent, with the Friday-Monday surge from Chinese
officials’ coordinated support almost forgotten.

Tokyo ended the morning session 0.1 percent lower, Seoul dropped 0.4
percent and Sydney was 0.3 percent lower.

Taipei, Wellington and Manila were also down, though Singapore edged
slightly higher.

– ‘Wall of worry’ –

David Kudla, chief executive officer of Mainstay Capital Management, told
Bloomberg Television: “We’ve come up upon a tremendous wall of worry for US
stocks and stocks around the world. Concern among investors is the
deceleration in earnings growth.”

Energy companies were among the worst hit after both main contracts
plunged more than four percent Tuesday after Saudi Energy Minister Khalid al-
Falih said the major producer would boost output and spare capacity to help
maintain supplies.

Prices had hit four-year highs this month with sanctions due to be imposed
on Iran next month, while Venezuela continued with an economic and political
crisis and US data pointed to a pick-up in demand.

However, they have dipped in recent weeks owing to growing concerns about
the global economy, particularly China, and a rise in the US dollar, which
makes the commodity expensive for holders of other currencies.
While Brent and WTI were flat Wednesday, Sydney-listed Woodside Petroleum
fell 1.5 percent, while Inpex tanked 3.7 percent in Tokyo and CNOOC dived 3.1
percent in Hong Kong.

Investors are also keeping an eye on Italy after the EU rejected the
populist government’s big-spending budget, the first time it has turned a
member away over spending rules violations.

With Rome likely to ignore the decision, the move puts the two on course
to a clash, just as the EU struggles to reach a deal for Britain to leave the
bloc with a deadline imminent.

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: DOWN 0.1 percent at 21,983.72 (break)

Hong Kong – Hang Seng: DOWN 0.2 percent at 25,291.48

Shanghai – Composite: DOWN 0.5 percent at 2,582.94

Euro/dollar: DOWN at $1.1464 from $1.1472 at 2040 GMT

Pound/dollar: DOWN at $1.2980 from $1.2985

Dollar/yen: DOWN at 112.36 from 112.41 yen

Oil – West Texas Intermediate: DOWN three cents at $66.40 per barrel

Oil – Brent Crude: DOWN one cent at $76.43 per barrel

New York – Dow: DOWN 0.5 percent at 25,191.43 (close)

London – FTSE 100: DOWN 1.2 percent at 6,955.21 (close)

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