Energy firms lead Asia markets down after oil plunge, dollar up

AFP, HONG KONG: Energy firms led a broad sell-off in Asian markets yesterday following a five per cent plunge in oil prices, but the dollar held on to gains after a surprisingly strong US jobs report.
Wall Street suffered another loss after a closely watched report showed a shock surge in US oil inventories that rekindled worries about a global supply glut that has hammered the crude market since mid-2014.
The Energy Department revealed a whopping eight million barrel increase in supplies over the past week -- four times more than expected -- owing to higher domestic production and increased stockpiling.
The news battered the oil market, with both main contracts slumping more than five per cent to lows not seen since the end of last year.
Jeffrey Halley, senior market analyst at OANDA, said the report was the "straw that broke the camel's back", with concerns already abound that Russia was not pulling its weight on much-vaunted production cuts agreed between OPEC and non-OPEC countries in November.
And Greg McKenna, chief market strategist at AxiTrader, said there is growing unease that too much of the burden on reducing output is being shouldered by OPEC nations, particularly kingpin Saudi Arabia.
While oil edged back up Thursday, Asian energy firms took the heat. Japan's Inpex shed 1.2 per cent, Hong Kong-listed PetroChina and CNOOC were each more than two per cent down and Woodside Petroleum dived 1.1 per cent in Sydney.
US private jobs sparkle
That in turn hit wider markets, with Hong Kong down more than one per cent in the afternoon and Shanghai 0.7 per cent off at the close. Traders brushed off another jump in China's factory gate prices that indicate a return to inflation in the country, with consumer inflation continuing struggle.
Sydney fell 0.3 per cent and Seoul was 0.2 per cent off and Singapore slipped 0.9 per cent. Taipei dived one per cent.
"The data catalysed a new wave of glut concerns as the higher oil price might spur North American's production, especially of shale oil, which may ultimately counterbalance OPEC's effort to support oil prices," said CMC Markets analyst Margaret Yang.
The oil figures overshadowed a surprise jump in private jobs creation in the US, which beefed up expectations for Friday's key government jobs report and reinforced expectations the Federal Reserve will hike interest rates next week.
That in turn fired a rally in the dollar, which peaked close to 115 yen Wednesday before paring the gains, with traders still uncertain as President Donald Trump has provided little detail on his plans to ramp up infrastructure spending and cut taxes.
The dollar advance on the yen provided the region with one of its only advances as Tokyo added 0.3 per cent to end a four-day losing streak.
Also acting as a weight on further dollar gains are concerns about upcoming elections in France and the Netherlands as well as geopolitical crises including North Korea's recent missile test.
The euro dipped ahead of a closely watched policy meeting by the European Central Bank later in the day. Wall Street stocks rose modestly early Wednesday after data showed much stronger US private-sector hiring in February.
Private payrolls increased an eye-popping 298,000 in the month, the biggest increase in nearly six years and beating the consensus forecast for a 180,000 rise, according to payroll services firm ADP.
The data come two days before the official US government employment report for February, which analysts expect will show a gain of 188,000 jobs.
About 15 minutes into trading, the Dow Jones Industrial Average stood at 20,943.76, up 0.1 percent.
The broad-based S&P 500 added 0.2 percent at 2,371.90, while the tech-rich Nasdaq Composite Index gained 0.3 percent to 5,852.06.
US stocks have fallen the last two sessions, a retreat seen as a consolidation after Wall Street set multiple records last week.
Analysts have expressed skepticism that President Donald Trump will succeed in quickly enacting tax cuts and other growth measures, factors that pushed the stock market higher.
Caterpillar fell 1.0 percent after the New York Times reported that a government-commissioned report concluded the industrial giant intentionally committed tax and financial reporting fraud. Federal investigators raided Caterpillar offices last week.
Retailers Urban Outfitters and Children's Place went in opposite directions after reporting earnings, with Urban Outfitters tumbling 8.0 percent and the Children's Place surging 16.8 per cent.

 

Energy firms lead Asia markets down after oil plunge, dollar up

AFP, HONG KONG: Energy firms led a broad sell-off in Asian markets yesterday following a five per cent plunge in oil prices, but the dollar held on to gains after a surprisingly strong US jobs report. Wall Street suffered another loss after a closely watched report showed a shock surge in US oil inventories that rekindled worries about a global supply glut that has hammered the crude market since mid-2014. The Energy Department revealed a whopping eight million barrel increase in supplies over the past week -- four times more than expected -- owing to higher domestic production and increased stockpiling. The news battered the oil market, with both main contracts slumping more than five per cent to lows not seen since the end of last year. Jeffrey Halley, senior market analyst at OANDA, said the report was the straw that broke the camels back, with concerns already abound that Russia was not pulling its weight on much-vaunted production cuts agreed between OPEC and non-OPEC countries in November. And Greg McKenna, chief market strategist at AxiTrader, said there is growing unease that too much of the burden on reducing output is being shouldered by OPEC nations, particularly kingpin Saudi Arabia. While oil edged back up Thursday, Asian energy firms took the heat. Japans Inpex shed 1.2 per cent, Hong Kong-listed PetroChina and CNOOC were each more than two per cent down and Woodside Petroleum dived 1.1 per cent in Sydney. US private jobs sparkle That in turn hit wider markets, with Hong Kong down more than one per cent in the afternoon and Shanghai 0.7 per cent off at the close. Traders brushed off another jump in Chinas factory gate prices that indicate a return to inflation in the country, with consumer inflation continuing struggle. Sydney fell 0.3 per cent and Seoul was 0.2 per cent off and Singapore slipped 0.9 per cent. Taipei dived one per cent. The data catalysed a new wave of glut concerns as the higher oil price might spur North Americans production, especially of shale oil, which may ultimately counterbalance OPECs effort to support oil prices, said CMC Markets analyst Margaret Yang. The oil figures overshadowed a surprise jump in private jobs creation in the US, which beefed up expectations for Fridays key government jobs report and reinforced expectations the Federal Reserve will hike interest rates next week. That in turn fired a rally in the dollar, which peaked close to 115 yen Wednesday before paring the gains, with traders still uncertain as President Donald Trump has provided little detail on his plans to ramp up infrastructure spending and cut taxes. The dollar advance on the yen provided the region with one of its only advances as Tokyo added 0.3 per cent to end a four-day losing streak. Also acting as a weight on further dollar gains are concerns about upcoming elections in France and the Netherlands as well as geopolitical crises including North Koreas recent missile test. The euro dipped ahead of a closely watched policy meeting by the European Central Bank later in the day. Wall Street stocks rose modestly early Wednesday after data showed much stronger US private-sector hiring in February. Private payrolls increased an eye-popping 298,000 in the month, the biggest increase in nearly six years and beating the consensus forecast for a 180,000 rise, according to payroll services firm ADP. The data come two days before the official US government employment report for February, which analysts expect will show a gain of 188,000 jobs. About 15 minutes into trading, the Dow Jones Industrial Average stood at 20,943.76, up 0.1 percent. The broad-based SP 500 added 0.2 percent at 2,371.90, while the tech-rich Nasdaq Composite Index gained 0.3 percent to 5,852.06. US stocks have fallen the last two sessions, a retreat seen as a consolidation after Wall Street set multiple records last week. Analysts have expressed skepticism that President Donald Trump will succeed in quickly enacting tax cuts and other growth measures, factors that pushed the stock market higher. Caterpillar fell 1.0 percent after the New York Times reported that a government-commissioned report concluded the industrial giant intentionally committed tax and financial reporting fraud. Federal investigators raided Caterpillar offices last week. Retailers Urban Outfitters and Childrens Place went in opposite directions after reporting earnings, with Urban Outfitters tumbling 8.0 percent and the Childrens Place surging 16.8 per cent.