Asian Stocks Slide As Investors Eye Falling Oil Prices
- Most Asian markets were in the red as Wednesday’s session bowed out
- Oil prices were front and center, wilting further as investors fear an entrenched supply glut
- Bank of Japan Governor Kuroda had little new for markets
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Asian stocks were mostly lower Wednesday; oil prices have now fallen into bear-market territory, which weighed on commodity sectors around the region. The long-awaited inclusion of Chinese stocks in the key MSCI indexes offered Chinese markets some initial support but only Shanghai managed to hold some gains into the afternoon session.
Local data were thin on the ground. The minutes of the Bank of Japan’s April policy meeting created few waves but did at least underscore the markets’ view of a central bank not about to shift policy.
The US Dollar slipped back from one-month highs against a basket of widely-traded rivals. The British Pound continued to struggle after Bank of England Governor Mark Carney appeared to quash hopes of a near-term interest rate increase in a speech on Tuesday. Bank of Japan Governor Haruhiko Kuroda spoke in Tokyo but had little new for markets. He said that while he and his colleagues still expect inflation to pick up, there was a still a very long way to go before it got near the central bank’s 2% target.
Crude prices, which lost about ten cents/barrel across the board. Investors seem to increasingly doubt that production cuts from more traditional producer nations will meaningfully reduce the markets’ now-ancient glut even if reduction quotas are complied with. Oil futures contracts reportedly slipped into bear-market territory, having fallen more than 20% from recent peaks.
Gold prices crept higher on Wednesday, albeit from the previous day’s five-week lows. The slightly weaker greenback and a pullback for equities reportedly helped.
It’s not a big day for scheduled economic news in the European or North American sessions. However investors can look forward to UK public finance numbers, the US existing home sales report and crude oil inventory data out of key delivery hub Cushing, Oklahoma.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter:@DavidCottleFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.