Asian Shares: Global Stocks Are Lower; China Shows Resilience
21 Junho 2017 - 12:10AM
Dow Jones News
By Ese Erheriene
Stocks were lower across the Asia-Pacific region early
Wednesday, as global price declines for oil hurt energy companies,
though mainland markets were resilient after MSCI Inc. said it
would include Chinese stocks in its emerging-markets index.
Oil prices returned to bear-market territory overnight and the
U.S. benchmark has fallen 20% from its last high point, with cuts
by the Organization of the Petroleum Exporting Countries offset by
increasing production elsewhere.
Australia's S&P/ASX 200 slid 1.2%, with the energy subindex
off 2%. The Nikkei Stock Average was 0.2% lower, edging down from a
22-month closing high in the previous session. Inpex and Japan
Petroleum were down 1.9% and 2.4%, respectively, with the Topix
mining subindex declining 1.6%.
South Korea's Kospi was down 0.6%, the Hang Seng Index was 0.8%
lower and the NZX index in New Zealand fell 0.5%.
"Oil is the main driver" for regional losses, said Tareck
Horchani, head of Asia-Pacific sales trading at Saxo Capital
Markets. "OPEC cuts are not having the expected effect as the shale
production in the U.S. is actually growing."
In early Asia trading, Nymex crude was last down 0.1% at $43.48
a barrel, while Brent crude was 0.2% lower at $45.92, adding to the
overnight declines.
Meanwhile, positive sentiment due to the inclusion of Chinese
stocks in the MSCI's emerging-market index was just enough to
offset outflows from the energy sector. However, gains were
limited, as the MSCI decision had been priced in, analysts
said.
The Shanghai Composite Index was last up 0.1% and stocks in
Shenzhen were 0.2% higher.
"China's entry into the MSCI global indices is a historic
milestone," although challenges remain, said Hao Hong, managing
director and head of research at Bocom International.
Worries linger that China's domestically traded A-shares are
overvalued when compared with global levels. In addition, there are
concerns about whether China's volatile market will adapt to
international best practices.
Meanwhile, financial stocks across the region also faced selling
pressure, with local weakness exacerbated by dovish comments from
central banks in the U.K. and U.S. Japan's Topix bank subindex was
1% lower, while the Hang Seng finance subindex was down 8%. In
Australia, the 'big four' banks-- Westpac Banking, Commonwealth
Bank of Australia, National Australia Bank, and Australia and New
Zealand Banking--fell between 1.2% and 2.1%.
In currencies, the offshore yuan gave up most of the gains
accrued in the wake of MSCI's decision. The U.S. dollar-yuan was
recently trading at 6.8206, compared with 6.7164 before the MSCI
news, a near nine-month high for the Chinese currency.
Speculation that demand for the yuan is coming from investors
seeking to buy Chinese shares is premature, notes Stephen Innes,
head trader for Asia at Oanda. Investors are "laying the
groundwork," but any actual buying of either the yuan or Chinese
shares is a long way off, he said.
Kenan Machado contributed to this article.
Write to Ese Erheriene at ese.erheriene@wsj.com
(END) Dow Jones Newswires
June 20, 2017 22:55 ET (02:55 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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