- Category: Economic
- Published Thursday, January 21, 2016
- CTV News
SEOUL, Korea, Republic Of - Asian stock markets were mostly in the red Thursday, surrendering early gains as oil drifted lower and sentiment remained fragile following big swings on Wall Street.
KEEPING SCORE: Tokyo's Nikkei 225 lost 2.4 per cent to 16,017.26 and South Korea's Kospi inched down 0.3 per cent to 1,840.53. Hong Kong's Hang Seng was down 1.3 per cent to 18,641.56. Australia's S&P/ASX 200 gained 0.5 per cent to 4,864.00. China's Shanghai Composite fell 0.8 per cent to 2,951.49. Markets in Taiwan, Singapore and Thailand also were lower. Indonesia rose.
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: "It is not advisable to interpret any rallies as evidence that we have seen a near-term bottom," Bernard Aw, a market strategist at IG in Singapore, said in a report. "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. At one point, it was down nearly 4 per cent. The Nasdaq composite lost 0.1 per cent to 4,471.69, closing at its lowest since October 2014.
ENERGY: The price of oil fell again after a brief pause. Benchmark U.S. crude for March delivery was down 12 cents to $28.23 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, its worst daily drop since September, to close at $26.55 in New York. It was U.S. oil's lowest since May 2003. Brent crude, a benchmark for international oils, lost 2 cents to $27.85 per barrel in London.
CURRENCIES: The dollar fell to 116.98 yen from 117.19 yen in the previous trading session. The euro rose to $1.0895 from $1.0874.