Asian shares defensive amid plunging oil prices
- Asian Market
- 3 months ago
Asian shares were on a slippery slope this morning as plunging oil prices fanned worries about a dimming outlook for the global economy as investors brace for a crucial meeting between U.S. and Chinese leaders at the end of week.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down slightly while Japan's Nikkei .N225 posted gains of 0.2 percent after initial losses.
On Wall Street, U.S. stocks closed lower on Friday, with the benchmark S&P 500 .SPXhitting its lowest close in more than six months as the energy sector was sold off in the wake of the oil slump.
The benchmark S&P 500 .SPX fell 0.66 percent to end about 10.2 percent down from its Sept. 20 closing record high, the second time this year it has entered a 10-percent correction after a rout in early February.
Oil prices traded near their lowest levels since October last year, having dived 8 percent on Friday for the biggest weekly losses in nearly three years, with rising U.S. production intensifying fears of a supply glut.
So far this month, both WTI and Brent futures were down more than 21 percent, on track for their biggest fall since October 2008 unless they recoup some of those losses this week.
U.S. crude futures CLc1 fetched $50.53 per barrel, slightly higher though not far from Friday’s low of $50.15.
Brent crude futures LCOc1 last stood at $58.99 per barrel, near Friday’s low of $58.41.
The oil woes also reflected anxiety over a heated trade war between the United States and China.
“The U.S.-China summit is the biggest event for the rest of the year,” said Nobuhiko Kuramochi, chief strategist at Mizuho Securities.
U.S. President Donald Trump and his Chinese counterpart Xi Jinping are expected to hold talks during a G20 summit in Argentina at the end of this month.
Barring any deals there, the U.S. tariffs on $200 billion goods are set to be raised to 25 percent next year from 10 percent, Kuramochi said.