HONG KONG: A sense of unease spread across Asian stock exchanges on Thursday with investors spooked by the sharp sell-off in oil sending regional markets lower.
With crude sitting around seven-year lows energy firms came under further pressure, following more losses on Wall Street.
“Today is all about risk-off moves. Oil is still excessively low at this price—concerns this will be the status quo is making investors avoid risk for now,” Mitsushige Akino, executive officer at Ichiyoshi Asset Management Co. in Tokyo, told Bloomberg News.
While oil prices edged up in early Asian trade, the gains were marginal compared with the losses of around nine percent suffered since the OPEC cartel on Friday decided against cutting output despite a global glut and weak demand.
Depressed crude prices continue to hurt some energy stocks, with Sydney-listed Woodside Petroleum down 0.7 percent, Origin 0.8 percent lower and Oil Search off more than 1 percent.
In Hong Kong, CNOOC eased nearly three percent. However, bargain-buying also provided some support with PetroChina up in Hong Kong and Inpex in Tokyo ticking higher.
Japan’s Nikkei index slipped 1.3 percent by the close, Sydney ended 0.8 percent lower and Hong Kong edged down 0.2 percent.
The falls followed a sell-off on Wall Street that saw all three indexes end in the red.
Shanghai finished 0.5 percent down after swinging through the day as a string of recent weak economic data provided some hope that Beijing will unveil a fresh round of growth-boosting measures.
The dollar was struggling to make up ground against most of its rivals, with an expected Federal Reserve hike in borrowing costs next week largely priced in.
The euro edged down but held its gains against the greenback after breaking $1.1 in US trade, with last week’s underwhelming stimulus from the European Central Bank providing support.
The Australian dollar rallied 0.8 percent after another surprisingly good jobs report eased talk of another rate cut by Canberra.
And the New Zealand dollar added 0.3 percent on talk that Thursday’s rate cut to a record low by Wellington would be the last for some time. South Korea’s won was slightly lower as an early advance petered out.
Yasuhiro Kaizaki, vice president for global markets at Sumitomo Mitsui Trust Bank in New York, warned traders faced a potentially painful week.
“Markets will be faced with heightened volatility going into the Fed’s gathering amid risk aversion and a lack of fresh news,” he told Bloomberg News. “Currencies will be looking for stability in stocks or commodities.”