Asian markets up pre-OPEC meet
ASIAN markets struggled yesterday as oil prices staged a mild recovery from the previous day’s sharp selloff, with investors growing uneasy over the chances of an output cut agreement at a crunch OPEC meeting.
Some of the biggest producers in the world head into the Vienna conference no closer to compromise on the details of a September agreement to address a glut that has battered crude markets for two years.
Uncertainty over the deal – with Iran and Iraq calling to be excluded and Russia looking only to freeze, rather than cut – has fuelled volatility on oil trading floors in the past week and both main oil contracts plunged 4 percent on November 29.
And while Brent and West Texas Intermediate recovered slightly in early Asian trade, investors were still moving cautiously.
“All eyes will be on Vienna today with Iran and Iraq both digging their respective heels in on production caps,” Jeffrey Halley, senior market analyst at OANDA, said.
“Failure to come up with a viable solution will see oil much lower tomorrow. The convoluted nature of the negotiations means compliance going forward will be an issue as well, one suspects.”
Worries about oil have weighed on global equities, which have enjoyed a strong few weeks since Donald Trump’s shock US election win, on hopes his policies will ramp up economic growth.
All three main New York indexes rose after data showed strongerthan-expected third-quarter US growth, higher housing prices in September and a sharp rebound in consumer confidence in November.
But Asian investors were a little more subdued and Tokyo ended flat, while Hong Kong came off earlier highs to sit up 0.23pc.
Shanghai sank 1pc, Sydney was 0.3pc lower, and Seoul added 0.3pc while Singapore put on 0.7pc.
The dollar recovered early losses against the yen, euro and pound to edge up as investors bet on sharper rises in US interest rates when the FED meets next month.
But the greenback was down against most high-yielding units in the region, having surged to multimonth highs against them last week.
The won was up 0.1pc, the yuan was 0.3pc higher – though still at around eight-year lows – and the Indian rupee added 0.2pc, having hit a record low last week. The Australian dollar and Malaysia’s ringgit were also stronger. –