Asian mar­kets cagey fol­low­ing Wall Street sell-off and oil glut

The Myanmar Times - - International Business -

ASIAN mar­kets fell yes­ter­day as un­cer­tainty over the fu­ture of cen­tral bank mone­tary pol­icy weighed on buy­ing in­ter­est while warn­ings of an ex­tended oil glut sank en­ergy firms.

The re­gion’s traders were given a rocky lead from Wall Street where all three main in­dexes ended more than 1 per­cent lower af­ter a plunge in crude prices shred­ded nerves.

In­vestors are try­ing to un­der­stand a slew of con­tra­dic­tory sig­nals from author­i­ties around the world, with the Fed­eral Re­serve and Bank of Ja­pan pre­par­ing to hold cru­cial pol­icy meet­ings next week.

The gath­er­ings come at a time of in­creas­ing anx­i­ety that cen­tral bankers are con­sid­er­ing wind­ing back on years of cheap cash that have helped fuel a rally in global eq­ui­ties.

While the Fed is con­sid­er­ing an in­ter­est rate hike, which some say could come this month, the Bank of Ja­pan has been ret­i­cent in pro­vid­ing con­crete prom­ises of any new stim­u­lus, de­spite weak growth at home.

“In­vestors are wak­ing up to the fact that val­u­a­tions are high and these record-low in­ter­est rates won’t be with us forever,” Mark Lis­ter, head of pri­vate wealth re­search at Craigs In­vest­ment Part­ners in Welling­ton, told Bloomberg News.

“There’s a lot of event risk com­ing up with the US elec­tion, sev­eral cen­tral bank meet­ings and oil prices are still look­ing shaky. Mar­kets had be­come dan­ger­ously re­liant on cen­tral bank sup­port and this is a wake-up call that it won’t al­ways be the case.”

How­ever, while there are con­cerns about mone­tary pol­icy, a re­port in the re­spected Nikkei busi­ness daily said BoJ pol­i­cy­mak­ers were con­sid­er­ing cut­ting bor­row­ing costs fur­ther into neg­a­tive ter­ri­tory, send­ing bank­ing shares tum­bling in Tokyo.

The city’s Nikkei in­dex ended 0.7pc lower.

Shang­hai fell 0.7pc and Sin­ga­pore shed 0.5p. Welling­ton, Manila and Jakarta also re­treated.

Hong Kong shifted in and out of neg­a­tive ter­ri­tory through the day and ended down 0.1pc, though Syd­ney added 0.4pc.

En­ergy shares were among the big losers as oil prices tum­bled af­ter the In­ter­na­tional En­ergy Agency (IEA) said global de­mand was slow­ing, point­ing to weak con­sump­tion in China and In­dia.

The com­mod­ity edged up slightly in Asian trade. West Texas In­ter­me­di­ate rose 37 cents to $45.27 and Brent added 31 cents to $47.41, par­tially re­vers­ing big falls the pre­vi­ous day.

Prices are also be­ing pres­sured by traders’ lack of con­vic­tion that any deal will emerge from a closely watched meet­ing be­tween OPEC and Rus­sia next week aimed at ad­dress­ing the global glut that has ham­mered prices for two years. –

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