Logo of Phnom Penh Post newspaper Phnom Penh Post - Asia markets down as oil up

Asia markets down as oil up

Content image - Phnom Penh Post
Tokyo up 0.1 per cent after the Nikkei saw its highest close in 27 years with the yen at its weakest since November. Martin BUREAU/afp

Asia markets down as oil up

Oil prices built on gains Tuesday after another blistering rally but most markets were in retreat as traders brushed off a positive lead from Wall Street and the US-Mexico-Canada trade deal.

Crude has motored in recent weeks on concerns about supplies after sanctions are imposed on Iran next month, while OPEC’s decision not to ramp up output, upheaval in Venezuela, a strong dollar and a drop in oil rigs have also pushed prices higher.

“Right now, we’re just in a bull market for oil because of the prospects of a very tight market later on in the year,” John Kilduff, founding partner at New York-based hedge fund Again Capital LLC, told Bloomberg News.

Both main contracts jumped almost three per cent Monday and clocked up fresh gains in Asia, with observers and key players in the sector now eyeing $100 a barrel.

Uncertainty ends

Kim Kwangrae, a commodities analyst at Samsung Futures, added: “The market’s very keen to figure out the size of the impact from the Iranian supply disruptions and whether Saudi Arabia and Russia are able to make up for the losses.

“At the same time, the US-Mexico-Canada Agreement is also improving the overall sentiment on oil.”

New York traders sent the Dow and S&P 500 higher after the US-Mexico-Canada Agreement (USMCA) was announced on Sunday to replace the North American Free Trade Agreement.

The deal drew an end to months of uncertainty after Donald Trump had threatened to tear up the decades-old NAFTA.

However, Asia was unable to follow suit. Hong Kong reopened after a long weekend to fall 2.4 per cent, with data indicating a drop in Chinese manufacturing activity denting sentiment.

The “HSI is trading with a negative bias, playing catch up from yesterday’s holiday, in reaction to the weaker China [manufacturing] data”, said Stephen Innes, head of Asia-Pacific trade at OANDA. “It’s more than apparent Hong Kong investors are in no mood to join the revamped NAFTA festivities.”

Sydney shed 0.8 per cent, Singapore fell 0.5 per cent and Seoul was off 1.3 per cent.

Wellington, Taipei, Jakarta and Manila were also well down.

But Tokyo edged up 0.1 per cent after the Nikkei on Monday saw its highest close in 27 years with the yen at its weakest since November.

Markets in China were closed for a holiday.

London fell 0.3 per cent in early trade, while Paris lost 0.6 per cent and Frankfurt shed 0.4 per cent.

In forex trade, the euro faced selling pressure on concerns about Italy’s finances after its populist government agreed on a massive spending boost that blew out its budget, while eurozone finance ministers warned Rome to abide by fiscal rules.

High-yielding and emerging market currencies were mostly down as dealers looked for safer bets. The dollar broke 15,000 Indonesian rupiah for the first time since 1998 during the Asian financial crisis, while Mexico’s peso and the South African rand were more than one per cent off against the greenback.

South Korea’s won, the Australian dollar and the Russian ruble were also sharply lower.

MOST VIEWED

  • First Khmer woman to pass out of West Point

    The life of a soldier certainly isn’t for everyone. The training is gruelling, the hours long and there’s no room for excuses. On top of that, soldiers must be ready to respond to sudden threats at a moment’s notice. Just ask Sithyka

  • Tourists urged not to skip trip

    The Ministry of Tourism has called on international tourists not to cancel trips to Cambodia, but urged them to adhere to several dos and don’ts when arriving in the Kingdom during the Covid-19 pandemic. The ministry released an eight-point instruction manual on Wednesday published

  • The taxman cometh – Cambodia’s capital gains tax casts the net on individual taxpayers

    In a country where only limited personal income tax existed, the new taxation law beginning January 1, 2021, will make taxpayers out of Cambodians, whether they are ready for it or not About two years ago, a little known amendment was made to Article 7 of the Law

  • Cambodian-American gets Star Trek treatment

    Kevin Ung, a Cambodian-American whose family escaped genocide during the Khmer Rouge’s reign of terror, was recently selected from thousands of applicants to participate in the Television Academy Foundation’s inaugural 2020 Star Trek Command Training Programme, a course intended to give hands-on filmmaking experience

  • Cambodia seeks to be transport hub

    Cambodia is working on several fronts to modernise its transport infrastructure and services, concentrating on opening new international gates to relieve and balance traffic congestion at its borders, Minister of Public Works and Transport Sun Chanthol said on Thursday. This is part of the Kingdom’

  • Deminers unearth ancient lion statue

    Cambodia Mine Action Centre (CMAC) director-general Heng Ratana told The Post on Tuesday that a statue of a lion was found by mine clearance experts while they were digging for a development project. It was sent to the Ministry of Culture and Fine Arts last