HONG KONG: Oil prices on Tuesday extended their heavy losses from the previous session, hitting Asia’s beleaguered energy stocks as most regional markets retreated from a recent rally.
Weak factory data from China to the United States also added to the selling pressure, although Shanghai and Hong Kong enjoyed early gains on hopes for fresh economy-priming measures out of Beijing.
The euphoria fuelled by Japan’s shock decision Friday to adopt a negative interest rate — effectively charging lenders to park cash with the central bank — soon gave way to the same fears that hammered global markets in January: China and low oil prices.
“We’re in for a period of continuing caution,” Angus Gluskie, a managing director at White Funds Management in Sydney, told Bloomberg News.
“It’s a period of uncertainty. China remains the biggest concern for investors. If the Chinese situation develops more adversely, it could have greater ramifications.”
In early trade Sydney lost 0.4 percent and Seoul shed 0.4 percent. Tokyo was marginally lower by lunch after surging about 4.5 percent over the previous two session in response to the Bank of Japan’s surprise stimulus announcement.
Taipei, Jakarta and Manila also saw big losses. But Shanghai was up 1.9 percent and Hong Kong was 0.1 percent up.
Oil resumed its slide back towards $30 a barrel, with both contracts down more than one percent in early Asian trade.
