Chinese shares led Asian markets higher yesterday, defying a dive on Wall Street, while the price of Brent crude plumbed 11-year lows on renewed worries over a global oil glut.
European shares are unlikely to follow Asia’s example, with spreadbetters expecting Britain’s FTSE 100 and France’s CAC40 to open down about 0.6 per cent, and Germany’s DAX .GDAXI to start the day 0.5 per cent lower.
Brent crude futures LCOc1 slumped as low as $36.17 a barrel ( see separate story) the lowest since 2004 as production around the world remained at or near record highs, and a strong dollar following last week’s US rate increases weighed on demand.
They were 1.3 per cent lower at $36.41 as of 0620 GMT while US crude CLc1 slid 24 cents to $34.49 a barrel, close to Friday’s 2015 lows.
Amid thin trading in a holiday-heavy week, MSCI’s broadest index of AsiaPacific shares outside Japan extended gains to 0.3 per cent, as investors bid up modestly priced Chinese blue-chips.China’s CSI300 index .CSI300 surged 2.9 per cent and the Shanghai Composite .SSEC jumped two per cent. Hong Kong’s Hang Seng .HSI rode the Chinese market’s coattails to climb 0.4 per cent.
“As we head into the final two weeks of the year, the limited year-end liquidity will be something to keep a watch on,” Bernard Aw, market strategist at IG in Singapore, wrote in a note. “Today, we have not much in the way of market-moving data for Asia, so market players will likely be sitting on the sidelines and trying to search for clarity.”
Australia’s main index ended the day little changed. Japan’s Nikkei .N225 extended losses from Friday to close down 0.4 per cent.
The market took a hit late Friday after the Bank of Japan announced some changes to its massive stimulus programme but stopped short of expanding the net amount of assets it buys, disappointing some who had hoped for a more aggressive move.
That in turn sent the yen broadly higher and caused some wild swings against the dollar. The dollar was down at 121.32 yen JPY after touching 123.58 on Friday.
The dollar slipped 0.1 percent to 98.619 against a basket of currencies .DXY amid very light trade, and the euro rose 0.1 per cent to $1.0877 EUR.
Wall Street also had a volatile end to the week with the expiration of stock and index options contracts generating heavy trading volume.
The Dow .DJI ended Friday down 2.1 per cent, while the S&P 500 .SPX lost 1.78 per cent and the Nasdaq .IXIC 1.59 per cent. For the week, the Dow fell 0.8 per cent, the S&P 500 0.3 per cent and the Nasdaq 0.2 per cent.
-REUTERS
