energy firms take fresh hit but most asia markets bounce
Last Updated : GMT 06:49:16
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Arab Today, arab today
Last Updated : GMT 06:49:16
Arab Today, arab today

Energy firms take fresh hit but most Asia markets bounce

Arab Today, arab today

Arab Today, arab today Energy firms take fresh hit but most Asia markets bounce

Airbag maker Takata is now worth less than a quarter
Hong Kong - AFP

Energy firms once again sank in Asian trade Thursday after another plunge in oil prices as glut fears return, though most regional markets enjoyed a recovery from the previous day's sell-off.

Crude traders are firmly in retreat as production cuts led by OPEC and Russia fail to calm fears about increasing output in the US and other nations including Nigeria. 

Both main contracts dived more than two percent Wednesday despite a bigger-than-forecast drop in US inventories, with analysts suggesting OPEC and Russia should announce further output cuts.

"The fact that oil is now falling on a bullish inventory number must be a red light for producers and traders alike," said Jeffrey Halley, senior market analyst at OANDA.

"OPEC/non-OPEC must now confront the oil elephant in the room, increasing the overall production cut from its present levels. The other choice will be to let the market set the price, which may mean oil drops to a level that even the newly slimline US shale industry struggles to break even at."

However, the crisis comes at a time of heightened tensions between OPEC kingpin Saudi Arabia and fellow members Iran and Qatar, leaving little chance of co-operation.

While crude edged up slightly in Asia, it is down around 25 percent from its January highs and sitting at levels not seen since August.

That has dug into energy firms for another day and in Hong Kong, Sinopec was one percent off while PetroChina slipped 0.6 percent. Sydney-listed Woodside Petroleum dropped 0.2 percent and Inpex tumbled more than two percent in Tokyo.

- Takata crashes -

On broader markets, Shanghai was up 0.3 percent, building on Wednesday's rally that came after MSCI finally approved Chinese mainland-listed or A-shares for inclusion in its emerging markets index.

Sydney added 0.5 percent and Singapore was 0.3 percent higher, while Seoul added 0.2 percent. Hong Kong was flat.

Tokyo finished the morning session 0.1 percent lower, with Takata the standout loser. The airbag maker crashed more than 50 percent Thursday on fears it is headed for bankruptcy and plans to sell its assets to a US company.

The Tokyo-based company at the centre of the global auto industry's biggest-ever safety recall has tumbled for four straight days and its stock is now worth less than a quarter of its value just a week ago.

In currency trade the dollar was unable to break out against the pound and yen, despite Federal Reserve indications it will hike interest rates again this year.

"There has been little follow through on the dollar revival that started the week as, in the absence of any actionable US economic data, the dollar bulls are erring on the side of caution.

"But with the with (Republicans) struggling to push through their economic agenda, it's difficult to envision an extended US dollar rally until the... administration gets its ducks in a row."

 - Key figures around 0230 GMT - 

Tokyo - Nikkei 225: DOWN 0.1 percent at 20,118.25 (break)

Hong Kong - Hang Seng: FLAT at 25,697.90

Shanghai - Composite: UP 0.3 percent at 3,166.13

Euro/dollar: DOWN at $1.1160 from $1.1163 at 0230 GMT

Pound/dollar: UP at $1.2674 from $1.2664

Dollar/yen: DOWN at 111.14 yen from 111.42 yen

Oil - West Texas Intermediate: UP 15 cents at $42.68 per barrel

Oil - Brent North Sea: UP 13 cents at $44.95

New York - Dow: DOWN 0.3 percent at 21,410.03 (close)

London - FTSE 100: DOWN 0.3 percent at 7,447.79 points (close)

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energy firms take fresh hit but most asia markets bounce energy firms take fresh hit but most asia markets bounce

 



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