HONG KONG (AFP) – Asian markets mostly rose yesterday following broad losses the previous two days but they struggled to maintain early momentum as analysts warned caution was prevailing on geopolitical worries and fading hopes for Donald Trump’s stimulus drive.
Energy firms were among the main laggards, tracking losses in their US counterparts, after a surprise jump in US petroleum inventories sent oil prices skidding almost four per cent Wednesday.
Hong Kong added one per cent, Sydney put on 0.3 per cent by the close, Seoul jumped 0.5 per cent and Singapore firmed 0.1 per cent.
But Tokyo ended marginally lower, while Shanghai was also flat. Wellington and Taipei slipped.
Markets have been rattled in recent weeks by a series of events that upended the optimism that welcomed in the year.
Trump’s failure to push through key healthcare reforms last month dealt a huge blow to his chances of passing the tax-cutting, big-spending plan that had helped fan a global rally since his election win in November.
That was followed by a US missile strike on Syria – which hit US-Russian relations – and the ongoing sabre-rattling by North Korea that has fuelled worries about nuclear conflict.
At the same time France and Germany are preparing for elections that could have big implications for the eurozone, and Britain’s shock decision to call a general election next month is also keeping dealers on edge.
An uninspiring Federal Reserve report Wednesday on the US economy also failed to provide any lift.
“Geopolitical angst, a faltering US economy and the UK snap election are consuming investor’s mindsets,” said Stephen Innes, senior trader at OANDA.
“With so many uncertainties offering few incentives for investors to re-engage risk exposure, clearly there is little market bravado as dealers appear to be disposed to participate after the fact, rather than play the post-election knee-jerk.”
Crude enjoyed a slight recovery in Asia, boosted by the oil minister of Saudi Arabia saying an output cut among major producers might need to be extended past its June-end cut-off in order to properly deal with a global glut.
But investors kept away from big-name companies after the US energy agency announced the increase in petroleum stockpiles, which fuelled worries about demand as the country heads into the crucial holiday season when Americans take to the roads.
CNOOC fell 0.4 per cent in Hong Kong, while Sydney-listed Woodside Petroleum lost 1.2 per cent and Inpex sank 1.3 per cent in Tokyo.
On forex markets, eyes are on this weekend’s first round vote in the French presidential elections, with a four-way race making it tough to call who will go into the run-off.