Asian traders on edge over oil and Italy
ASIAN traders moved cautiously yesterday, with the recent Trumpfuelled rally subdued by profittaking, uncertainty over a crucial vote in Italy and worries about an OPEC plan to cut oil production.
Markets have soared since Donald Trump was elected president on hopes his spending policies will ramp up the US economy.
However, analysts said dealers were taking a breather as other issues come to the fore, with the oil reduction plan in immediate focus.
OPEC members and non-members including Russia are scurrying to hammer out a deal before the group’s twice-yearly meeting today.
“Whether OPEC manages to make black gold instead of fools gold from its ongoing negotiations, we expect intra-day volatility to ratchet higher again into tomorrow,” Jeffrey Halley, senior market analyst at OANDA, said in a note.
There is also a growing nervousness about a weekend referendum in Italy on constitutional reform. Tensions between Italian Prime Minister Matteo Renzi and the European Union have reached boiling point ahead of the poll and he has suggested he would step down if voters reject the proposal.
Asian markets moved in and out of positive territory through the day.
Tokyo closed down 0.3 percent, while Hong Kong dipped 0.41pc and Shanghai ended up 0.2pc. Sydney slipped 0.1pc while Seoul and Singapore were all flat.
On currency markets the dollar was subdued, having chalked up multi-month highs against most peers last week on expectations US interest rates will rise in December and again next year.
“The dollar pullback appears to be technical in nature as there was no fundamental trigger for this move,” Elias Haddad of Commonwealth Bank of Australia said. –