Arab Today, arab today oil slide strong dollar drag asian shares lower
Last Updated : GMT 04:33:33
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Oil slide, strong dollar drag Asian shares lower

Arab Today, arab today

Arab Today, arab today Oil slide, strong dollar drag Asian shares lower

Crude posted its biggest loss in six weeks after news US commercial stocks surged by 9.36 million barrels last week
Hong Kong - AFP

Asian shares dropped on Thursday, with energy stocks taking a hammering from a slide in oil prices while a stronger dollar piled pressure on commodity producers.

Energy stocks dragged Wall Street and European equities lower on Wednesday after US oil prices dipped below $40 a barrel for the first time in five sessions.

Crude posted its biggest loss in six weeks after news US commercial stockpiles surged by 9.36 million barrels last week, more than three times the prediction of analysts polled by Bloomberg News.

Hints the US could raise interest rates next month drove the dollar higher, piling pressure on commodities and sending Sydney's resources-rich benchmark tumbling 1.13 percent.

Chinese stocks also fell, with Shanghai down 1.36 percent and Hong Kong falling 1.52 percent in afternoon trade. Tokyo closed down 0.64 percent and Seoul 0.46 percent.

"The oil price and equity markets are teetering on the verge of a much larger pullback as hawkish (US Federal Reserve) officials have lifted the US dollar," said Angus Nicholson, market analyst at IG.
"Markets in Asia look to be rolling over as the whole region suffered steady losses throughout the session."

Comments from several Fed members have raised expectations the bank may start to take a more bullish approach than signalled last week, when it held interest rates steady.

James Bullard, president of the St Louis Fed, fuelled speculation on Wednesday when he said more upbeat employment figures could see the US central bank tighten monetary policy.

"You get another strong jobs report, it looks like labour markets are improving, you could probably make a case for moving in April," he said.

- Commodities hit -

A stronger greenback makes it more expensive for investors using other currencies to buy dollar-priced commodities, and raw materials from iron ore to gold took a hit.
Oil prices were mixed during Asian trade on Thursday. The US benchmark WTI added 12 cents but held under $40 a barrel, trading at $39.91 in mid-afternoon, while Brent fell 15 cents to $40.32.

"Fed officials this week reminded the market that they still want to move forward with the rate hikes," Mark Lister, head of private wealth research at Craigs Investment Partners, told Bloomberg News.

"Investors have been looking for a reason to pull back and this is one... Concerns remain about how sharp the slowdown is in China."

Oil has taken a battering over concerns world demand cannot keep pace with a glut of supply as economic growth slows, particularly in major consumer China.

Moves by members of the OPEC producer group to cap production -- fresh talks are planned in Qatar on April 17 -- have pushed prices up from the 13-year lows they flirted with this year.

But few are predicting a major recovery any time soon, and energy companies slid in Asia on Thursday.

PetroChina fell 4.28 percent after it reported profits tumbled almost 70 percent to 35.5 billion yuan -- their lowest level since 1999 -- and CNOOC lost 3.38 percent in Hong Kong.

Commodities traders were also hit. BHP slumped 3.41 percent in Sydney, while Japanese trading house Mitsui & Co lost 7.51 percent after it forecast its first loss since 1947.

Shares in Australia's ANZ Bank also lost 5.21 percent after the lender forecast its bad debt charges from resource companies will be A$100 million higher than predicted.

- Key figures at 0630 GMT -

Tokyo - Nikkei 225: DOWN 0.64 at 16,892.33 (close)

Shanghai - Composite: DOWN 1.36 percent at 2,969.10

Hong Kong - Hang Seng: DOWN 1.52 percent at 20,301.03

Euro/dollar: DOWN at $1.1175 from $1.1183 on Wednesday

Dollar/yen: UP at 112.78 yen from 112.43 yen

New York - Dow: DOWN 0.5 percent at 17,502.59 (close)

London - FTSE 100: UP 0.1 percent at 6,199.11 (close)

-- Bloomberg News contributed to this report --


Source: AFP

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