Arab Today, arab today oil plunge fuels run on energy firms
Last Updated : GMT 00:51:37
Arab Today, arab today
Arab Today, arab today

As Asia stocks tumble

Oil plunge fuels run on energy firms

Arab Today, arab today

Arab Today, arab today Oil plunge fuels run on energy firms

Energy-linked firms took another battering in Asia on December 14
Hong Kong - Arab Today

Energy firms led another stock market sell-off Monday, but analysts said a fall in oil prices to seven-year lows was driven more by fears over demand and a supply glut than the Paris climate deal.

Crude has slumped more than 12 percent since the OPEC oil producers' group on December 4 opted against cutting its output levels, and there are warnings of further pain ahead as the global economy struggles.

Adding to the unease on trading floors is this week's Federal Reserve policy meeting that is widely expected to see US interest rates raised for the first time since 2006.

On Monday both main oil contracts fell again, with US benchmark West Texas Intermediate down 0.4 percent and Brent off 0.5 percent.

Among energy firms Sydney-based BHP Billiton shed 3.5 percent, Rio Tinto was two percent lower and Santos lost almost five percent.
Hong Kong-listed CNOOC sank 2.8 percent and Sinopec fell 1.8 percent in the afternoon. Inpex dived 2.9 percent in Tokyo while JX Holdings was 2.5 percent off.

But experts said it was unlikely the Paris agreement Saturday to limit global warming to below two degrees Celsius (3.6 degrees Fahrenheit) over pre-industrial levels had any real impact.

CMC Markets chief analyst Ric Spooner said: "It's difficult to strip out what impact there has been, if any, given the day already had so many negatives.

"That said, it's possible that investors will increasingly start to look to the medium- and long-term future of the oil and gas sector."

SBI Securities Nobuyuki Fujimoto said the energy-sector losses came "because of a plunge in oil prices", which since June 2014 have fallen from more than $100 a barrel to about $36.

"That has a more direct impact on shares" than the climate deal, he said.

- Shanghai rallies -
"Global warming is a problem, but it doesn't mean we won't use energy at all. Since it's difficult to rely on nuclear power now and renewable energy is limited, we have to use thermal power."

Tokyo's Nikkei had shed 1.8 percent by the close, while Hong Kong was off 0.7 percent in the afternoon. Sydney slipped two percent by the close and Seoul gave up one percent.

All three main indexes on Wall Street had ended in the red Friday.

However, Shanghai surged 2.5 percent as traders welcomed surprisingly strong Chinese economic data at the weekend. Miners were also boosted by news that China’s aluminium smelters pledged Friday to halt new mills.

Hong Kong-listed shares in SCMP Group were suspended as it was announced Chinese Internet giant Alibaba would pay US$266 million for the city's South China Morning Post newspaper.

The Chinese firm announced the purchase on Friday, saying it would use its "digital expertise" to provide "comprehensive and insightful news and analysis of the big stories in Hong Kong and China".

Also in Hong Kong, conglomerate Fosun International plunged about 10 percent as it resumed trading after it said last week its head was cooperating with authorities over an investigation. There were no details about what the inquiry was in connection with.

The firm's billionaire chairman Guo Guangchang, dubbed "China's Warren Buffett", reappeared Monday after he went missing Thursday.

- Key figures around 0715 GMT -

Tokyo - Nikkei 225: DOWN 1.8 percent at 18,883.42 (close)

Hong Kong - Hang Seng: DOWN 0.7 percent at 21,307.88

Sydney - S&P/ASX 200: DOWN 2.0 percent at 4,928.60 (close)

Shanghai - composite: UP 2.5 percent at 3,520.67 (close)

Euro/dollar: DOWN to $1.0959 from $1.0996 late Friday

Dollar/yen: UP to 121.22 yen from 120.86 yen

New York - Dow: DOWN 1.8 percent at 17,265.21 (close)

London - FTSE 100: DOWN 2.2 percent at 5,953 (close)
Source: AFP

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Arab Today, arab today oil plunge fuels run on energy firms Arab Today, arab today oil plunge fuels run on energy firms

 



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