Most Asian Stock Markets Fall Amid Renewed Weakness in Oil
May 04 2016 - 12:30AM
Dow Jones News
Most shares in Asia were back in the red Wednesday with
Australia slipping below breaking even for the year amid a renewed
fall in oil prices and a nearly 10% plunge in shares of
Anglo-Australian BHP Billiton Ltd.
The S&P/ASX 200 was down 1.2%, giving back some of its gains
from yesterday when Australia's central bank cut interest rates.
The benchmark, heavy on energy shares, is now close to flat for the
year, after breaking into positive territory for the first time
this year yesterday.
Heavy decliners Wednesday included BHP Billiton, which tumbled
9.6% in Sydney. That followed Brazilian federal prosecutors filing
a civil lawsuit Tuesday that demands mining companies—BHP Billiton,
Brazil's Vale SA, and their joint-venture Samarco Mineraç ã o—shell
out up to $43.55 billion for cleanup and remediation related to a
catastrophic dam failure last year.
Losses elsewhere in Asia included a 1.3% decline in the Hang
Seng Index, also weighed down by the energy sector. South Korea's
Kospi was down 0.6%. The Shanghai Composite Index slipped 0.4%.
"The street is back again to focusing on low global growth and
looking at the crude price as a barometer here," said Gavin Parry,
managing director at Parry International Trading Ltd.
The weakness reflects how shaky the region's rally has been
since mid-February, as global growth fears simmer in the
background. Meanwhile, Japan's stock market, which tumbled for two
sessions before closing for a three-day holiday, reopens Friday.
That market has been especially volatile, as investors try to gauge
the Bank of Japan, which last Thursday left monetary policy
unchanged.
Pressuring Japanese shares is the yen, which has been at its
strongest levels since October 2014. A strong currency at home
generally hurts exporting companies by making their goods less
competitive and eroding their repatriated earnings.
"Increasing [currency] volatility resulting from central bank
policies is transmitting waves of uncertainty through global
markets," said Margaret Yang, market strategist with CMC Markets.
"A stronger yen will probably continue to blacken the outlook for
Japanese equity markets."
During Asian overnight hours, U.S. crude oil prices declined,
bringing its losses in three sessions to more than 5%. That sent
U.S. stock indexes lower.
By early Wednesday in Asia, the fall was also weighing
here—energy shares fell almost 4% in Australia and 2.9% in Hong
Kong. Shares of Rio Tinto Ltd. and Fortescue Metals Group Ltd. were
6% and 4.2% lower, respectively.
In Australia, shares are close to joining benchmarks in Korea
and a number of Southeast Asian countries in positive territory for
the year, although steep declines remain in the region, with
Shanghai stocks still off 15% since the beginning of the year.
Ric Spooner, CMC Markets chief market strategist, said that
"traders are becoming concerned about the possibility that the next
volatile market swing, in this case downward, may not be too far
away."
Losses in BHP in Sydney follow a 5% plunge for the firm's London
listing overnight.
In currencies, the Australian dollar, which reached its weakest
level against the U.S. dollar in more than a month after the
central bank's rate cut, was last rebounding by 0.3% in early Asian
trading.
Paul Kiernan contributed to this article.
Write to Chao Deng at Chao.Deng@wsj.com
(END) Dow Jones Newswires
May 04, 2016 00:15 ET (04:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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