- Category: Economic
- Published Thursday, January 21, 2016
- CTV News
SEOUL, Korea, Republic Of - Asian stocks snapped a losing streak in global markets Thursday after Wall Street trimmed losses and oil paused after a steep fall, but analysts said sentiment was fragile and more losses could be in store.
KEEPING SCORE: Tokyo's Nikkei 225 rose 0.8 per cent to 16,552.88 and South Korea's Kospi gained 0.7 per cent to 1,858.33. Hong Kong's Hang Seng advanced 0.4 per cent to 18.971.97. Australia's S&P/ASX 200 gained 1.1 per cent to 4,894.10. China's Shanghai Composite rose 0.5 per cent to 2,990.49. Markets in also rose in Taiwan and Southeast Asia.
GLOBAL TURBULENCE: Stock markets have taken a beating along with the price of oil as investors believe stock prices have risen too high at a time when the near-term global economic outlook is for modest growth rather than a strong upswing. The IMF lowering its forecast for global growth this year to 3.4 per cent, oil falling below $30 a barrel and China's growth slowing to a 25-year low last year have all contributed to the sell-off this week. The European Central Bank is expected to keep interest rates on hold at ultra-low levels when its governing council meets later in the day as it monitors risks from turmoil in global markets.
THE QUOTE: The S&P 500 clawing back from a 3.7 per cent fall on Wednesday "should provide a morsel of sorely-needed confidence into the equity markets in Asia," Bernard Aw, a market strategist at IG in Singapore, said in a report. "But don't expect a miracle," he said. "It is not advisable to interpret any rallies as evidence that we have seen a near-term bottom. As disciples of technical analysts know very well, a downtrend is typically marked by periods of rebounds."
WALL STREET: On Wednesday, U.S. stocks closed down but off their lows. The Dow closed down 1.6 per cent to 15,766.74. The S&P 500 index fell 1.2 per cent to 1,859.33, its lowest closing level since April 2014. The Nasdaq composite lost 0.1 per cent to 4,471.69, closing at its lowest since October 2014.
ENERGY: The price of oil rose slightly after suffering its worst daily drop since September. Benchmark U.S. crude for March delivery was up 25 cents to $28.60 a barrel in electronic trading on the New York Mercantile Exchange. The February contract, which expired Wednesday, dived 6.7 per cent, or $1.91, to close at $26.55 in New York, which was U.S. oil's lowest level since May 2003. Brent crude, a benchmark for international oils, added 29 cents to $28.17 per barrel in London.
CURRENCIES: The dollar rose to 117.25 yen from 117.19 yen in the previous trading session. The euro rose to $1.0885 from $1.0874.