WELLINGTON, Dec 8 ― Oil’s slump to a six-year low damped the outlook for Asian equities, with index futures from Tokyo to Hong Kong signalling losses following a selloff in US energy producers. Australia’s dollar was weaker amid a slump in iron ore prices, before data on Chinese trade projected to show ongoing deterioration in the region’s largest economy.
Nikkei 225 Stock Average futures slipped 0.5 per cent in Osaka with US crude closing below US$38 (RM162) a barrel after OPEC abandoned its strategy of limiting production despite a glut in the commodity. Global energy stocks sank the most since August 24 yesterday. The Aussie was near its lowest level in a week and futures on equities in Sydney signaled losses after prices for iron ore, the country’s biggest export earner, slid to a record low.
Oil has plunged more than 40 per cent in the past year, hampering recoveries in the US and Europe as capital spending wanes and inflation holds below central-bank targets. The slump, ignited by concern the Organization of Petroleum Exporting Countries’ abandonment of quotas will see millions of barrels of crude come onto an already oversupplied market, is occurring as investors also focus on further potential divergence in global monetary policy. China is projected to report a fifth monthly drop in exports Tuesday, while Japan issues a final read on third-quarter gross domestic product.
“Market focus at the moment is on the potential deflationary effects of lower oil prices and the signaling that aggregate demand is weak,” Michael McCarthy, chief markets strategist in Sydney at CMC Markets, said in an e-mail. “At some stage, however, there may be a collective awakening to the immediate impact lower input prices have on prices.”
Energy producers slid 3.7 per cent in the US, dragging the Standard & Poor’s 500 Index down 0.7 per cent Monday. New Zealand’s S&P/NZX 50 Index, the first major stock gauge to start trading each day in the Asian region, slipped 0.2 per cent as of 7.48am Tokyo time. ― Bloomberg
