TOKYO – Asian stock markets sank Tuesday, led by a plunge in the Shanghai index, after a renewed slump in the price of oil kept investors on edge about the global economy.
KEEPING SCORE: The Shanghai Composite dropped 6.5 per cent in afternoon trading to 2,748.54. Japan’s Nikkei 225 lost 2.4 per cent to 16,708.90. South Korea’s Kospi slipped 1.2 per cent to 1,871.69. Hong Kong’s Hang Seng was down 2.5 at 18,863.64. Other regional markets were also mostly down.
OIL CONCERNS: Plunging oil prices have been hitting profits at energy companies and getting investors worried the fall in energy costs could add to deflationary pressures in major economies. Slower growth in China is one reason for oil prices to fall. The slide also reflects oversupply including new sources of production such as shale oil in the U.S. Oversupply is set to be compounded by the lifting of sanctions on Iran, allowing it resume oil exports.
THE QUOTE: “Concerns about a supply glut in global oil markets, with Iran oil adding to existing stock along with uncertainties in China were probably the key factors” in the oil price drop, said Cynthia Jane Kalasopatan of the Singapore Treasury Division of Mizuho Bank. “Sentiment remains fragile; thus on and off shift in sentiment is not so surprising.”
WALL STREET: The Dow Jones industrial average fell 208.29 points, or 1.3 per cent, to 15,885.22 on Monday. The Standard & Poor’s 500 shed 29.82 points, or 1.6 per cent, to 1,877.08. The Nasdaq composite index lost 72.69 points, or 1.6 per cent, to 4,518.49.
ENERGY: Benchmark U.S. crude was down 76 cents to $29.58 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.85, or 5.7 per cent, to $30.34 a barrel in New York on Monday. Brent crude, a benchmark for international oils, lost 86 cents to $39.64 a barrel in London. It lost $1.68, or 5.2 per cent, to $30.50 a barrel the previous day.
CURRENCIES: The dollar fell to 118.10 yen from 118.23 yen in the previous trading session. The euro fell to $1.0842 from $1.0850.
© 2016 The Associated Press