Asian markets were largely down in early trading Tuesday as oil prices surged to nearly six-month highs after the U.S. said it would soon impose sanctions on all buyers of Iranian oil.
was off 0.2%, while Hong Kong’s Hang Seng Index
was down about 0.1%. The Shanghai Composite
slipped 0.8% and the smaller-cap Shenzhen Composite
dropped 1.4%. South Korea’s Kospi
was about flat, and benchmark indexes in Taiwan
pulled back slightly. Australia’s S&P/ASX 200
Among individual stocks, Rakuten
, Fast Retailing
slumped in Tokyo trading, while oil producer Inpex
jumped. In Hong Kong, CNOOC
and China Life Insurance
gained while real estate companies such as Country Garden
and China Overseas Land & Investment
declined. Hyundai Motor
rose in South Korea, while Foxconn
slipped in Taiwan. Energy companies such as Beach Energy
and Woodside Petroleum
advanced in Australia.
There was no strong impetus for buying in Asia. Reports from a recent high-level meeting in China, which was chaired by President Xi Jinping, showed willingness to fine-tune monetary policy but raised questions about future government stimulus. Traders were waiting for a slew of U.S. earnings reports from big companies such as Twitter
Over on Wall Street, the spike in crude oil prices boosted energy stocks on an otherwise listless Monday.
The broad S&P 500
was up 0.1% at 2,907.97 while the Dow Jones Industrial Average
fell 0.2% to 26,511.05. The Nasdaq composite
picked up 0.2% to 8,015.27.
On Monday, the Trump administration said it would no longer exempt any countries from U.S. sanctions if they continue to buy Iranian oil. The administration had granted eight waivers when it reimposed sanctions on Iran in November. These expire May 2.
Asian countries, namely China, India, Japan and South Korea are major importers of Iranian oil. The move will choke off more than $50 billion of annual Iranian income, which the U.S. says funds destabilizing activity in the Middle East and beyond.
“The prompt contracts quickly repriced higher on panic fears that markets could face an immediate supply crunch, adding more pressure to the already tenuous global supply squeeze,” Stephen Innes of SPI Asset Management said in a commentary.
Industry experts said the sanctions could potentially remove up to 1.2 million barrels of oil per day from international markets. But that number will likely be lower, depending on how countries respond and just how much oil Iran continues to export.
Oil prices rose for the third straight day on the news. Benchmark U.S. crude
added 34 cents to $65.89 per barrel in electronic trading on the New York Mercantile Exchange. The contract surged $1.48 to $65.55 per barrel on Monday. Brent crude
, used to price international oils, gained 29 cents to $74.33 per barrel in London. It jumped $2.07 to $74.04 per barrel in the previous session.
weakened to 111.80 yen from 111.93 yen late Monday.
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