Asian shares mostly higher as crude oil prices recover
Investors are still bracing for a severe, painfully deep recession
TOKYO, April 23, (AP): Asian shares were mostly higher Thursday following a rally on Wall Street and even oil prices recovering from their recent plunge to zero.
Japan’s benchmark Nikkei 225 added 1.5% to finish at 19,429.44, while South Korea’s Kospi rose 1.1% to 1,914.73. Australia’s S&P/ ASX 200 lost earlier gains to inch down nearly 0.1% to 5,217.10. Hong Kong’s Hang Seng edged up 0.6% to 24,036.84, while the Shanghai Composite inched down 0.1% to 2,839.87.
Prakash Sakpal and Nicholas Mapa, economists at ING, said a rise in oil prices, which have been crashing, will help Asian shares somewhat.
“But rising COVID-19 cases in the region will likely cap any rally,” they said in a commentary.
Investors are still bracing for a severe, painfully deep recession after businesses shut down worldwide in hopes of slowing the spread of the coronavirus. U.S. stocks were down by roughly a third a month ago on that expectation. Now, even as depressing economic and health reports pile up, some investors are looking ahead to parts of the economy reopening as infections level off in some areas.
“Right now, it’s about the economy beginning to open, even at the margins,” said Quincy Krosby, chief market strategist at Prudential Financial. “We’re watching Germany, the largest economy in Europe, begin to open. What this suggests is if things go well in these economies, we’re going to see more states begin to open, and perhaps open more broadly.”
The S&P 500 rose 2.3% to 2,799.31, trimming its loss for the week to 2.6%.
The Dow Jones Industrial Average climbed 2%, to 23,475.82, and the Nasdaq composite picked up 2.8%, to 8,495.38.
Energy stocks jumped, riding the ripple of rising oil prices. Halliburton, Apache and Diamondback Energy all added at least 9%. All three, though, are still down more than 60% for the year so far.
Benchmark crude added $1.58 to $15.36 a barrel in electronic trading on the New York Mercantile Exchange. The price of a barrel of U.S. oil to be delivered in June jumped 19% to settle at $13.78 on Wednesday.
It had zigzagged in the morning before turning higher after President Donald Trump threatened the destruction of any Iranian gunboats that harass U.S. Navy ships, raising the possibility of a disruption to oil supplies.
The big gain, though, means it’s recovered just a fraction of its steep losses. It was close to $30 at the start of last week and nearly $60 at the beginning of the year. A collapse in demand for energy combined with continued production in countries around the world means too much oil is sloshing around, depressing its price.
Brent crude, the international standard, rose $2.13 cents to $22.50 per barrel.
On Wall Street, other companies that have been hurt by the coroanvirus pandemic also rose after offering some slight hints of hope.
Chipotle Mexican Grill, for example, said that a key sales figure plunged 16% in March on widespread stay-athome orders. But it hit a bottom during the week of March 29, down 35%, and has since improved a bit. Declines the past week were “in the high teens.” Its shares rose 12.1%.
Stocks of companies that have been winners in the new stuck-at-home economy, meanwhile, are also telling investors just how much they’ve been benefiting.