Energy stocks hit as oil resumes losses

Asia markets retreat

AFP, HONG KONG: Oil prices yesterday extended their heavy losses from the previous session, hitting Asia’s beleaguered energy stocks as most regional markets retreated from a recent rally.
Weak factory data in China and the United States added to the selling pressure, although Shanghai rallied on hopes of fresh economy-priming measures from Beijing and after the central bank pumped billions of dollars into financial markets.
The euphoria fuelled by Japan’s shock decision Friday to adopt a negative interest rate—effectively charging lenders to park cash with the central bank—soon yielded to the same fears that caused a rout in global markets in January: China’s slowing growth and low oil prices.
“We’re in for a period of continuing caution,” Angus Gluskie, a managing director at White Funds Management in Sydney, told Bloomberg News.
“It’s a period of uncertainty. China remains the biggest concern for investors. If the Chinese situation develops more adversely, it could have greater ramifications.”
Tokyo fell 0.6 per cent after surging about 4.5 per cent over the previous two sessions in response to the Bank of Japan’s surprise
stimulus announcement. Sydney lost one per cent after Australia’s central bank held off cutting interest rates, while Seoul also shed one per cent.
Hong Kong lost 0.8 per cent while Taipei, Jakarta and Manila also saw losses.
But Shanghai closed up 2.3 per cent thanks to the People’s Bank of China’s liquidity injection days before the week-long Lunar New Year break.
In early European trade London and Frankfurt shed 0.4 per cent and Paris was off 0.5 per cent.
Oil slides towards $30
Oil resumed its slide back towards $30 a barrel, with both contracts down more than 1.5 per cent in Asian trade.
On Monday US benchmark West Texas Intermediate tanked almost six per cent and Brent dived around five per cent as the rally fuelled by last week’s hopes for output talks between Russia and OPEC faded.
Among energy stocks CNOOC shed 1.1 per cent in Hong Kong and PetroChina lost 0.9 per cent.
Sydney-listed Santos gave up 4.3 per cent and BHP Billiton was 2.2 per cent lower after Standard & Poor’s cut its credit rating on the firm due to falling commodity prices.
In Tokyo Inpex plunged almost five per cent.
Investors are also awaiting a US stockpiles report Wednesday and are expecting to see another jump, indicating demand remains weak.
Crude was also hurt by the release of key gauges indicating manufacturing activity in China and the US continued to shrink in January. Flat US consumer spending for December also weighed.

 

Energy stocks hit as oil resumes losses

Asia markets retreat

AFP, HONG KONG: Oil prices yesterday extended their heavy losses from the previous session, hitting Asias beleaguered energy stocks as most regional markets retreated from a recent rally. Weak factory data in China and the United States added to the selling pressure, although Shanghai rallied on hopes of fresh economy-priming measures from Beijing and after the central bank pumped billions of dollars into financial markets. The euphoria fuelled by Japans shock decision Friday to adopt a negative interest rateeffectively charging lenders to park cash with the central banksoon yielded to the same fears that caused a rout in global markets in January: Chinas slowing growth and low oil prices. Were in for a period of continuing caution, Angus Gluskie, a managing director at White Funds Management in Sydney, told Bloomberg News. Its a period of uncertainty. China remains the biggest concern for investors. If the Chinese situation develops more adversely, it could have greater ramifications. Tokyo fell 0.6 per cent after surging about 4.5 per cent over the previous two sessions in response to the Bank of Japans surprise stimulus announcement. Sydney lost one per cent after Australias central bank held off cutting interest rates, while Seoul also shed one per cent. Hong Kong lost 0.8 per cent while Taipei, Jakarta and Manila also saw losses. But Shanghai closed up 2.3 per cent thanks to the Peoples Bank of Chinas liquidity injection days before the week-long Lunar New Year break. In early European trade London and Frankfurt shed 0.4 per cent and Paris was off 0.5 per cent. Oil slides towards $30 Oil resumed its slide back towards $30 a barrel, with both contracts down more than 1.5 per cent in Asian trade. On Monday US benchmark West Texas Intermediate tanked almost six per cent and Brent dived around five per cent as the rally fuelled by last weeks hopes for output talks between Russia and OPEC faded. Among energy stocks CNOOC shed 1.1 per cent in Hong Kong and PetroChina lost 0.9 per cent. Sydney-listed Santos gave up 4.3 per cent and BHP Billiton was 2.2 per cent lower after Standard Poors cut its credit rating on the firm due to falling commodity prices. In Tokyo Inpex plunged almost five per cent. Investors are also awaiting a US stockpiles report Wednesday and are expecting to see another jump, indicating demand remains weak. Crude was also hurt by the release of key gauges indicating manufacturing activity in China and the US continued to shrink in January. Flat US consumer spending for December also weighed.