Asian stocks drop after Wall Street fall on oil prices

AP News
Posted: Dec 07, 2015 11:31 PM
Asian stocks drop after Wall Street fall on oil prices

BEIJING (AP) — Asian stock markets fell Tuesday after a decline in oil prices to a six-year low pushed down Wall Street.

KEEPING SCORE: China's Shanghai Composite Index fell 1.3 percent to 3,489.88 points and Hong Kong's Hang Seng lost 1.7 percent to 21,829.55. Japan's Nikkei 225 shed 1 percent to 19,496.97. Australia's S&P/ASX 200 retreated 0.6 percent to 5,123.80 and South Korea's Kospi lost 0.4 percent to 1,956.39. Benchmarks in Taiwan, Singapore and Indonesia also fell.

OIL SLUMP: Traders sold oil futures following OPEC's decision last week to maintain production levels. That stance combined with slower global growth has left the world awash in oil, pushing down prices to their lowest level since 2009. Brent crude added 30 cents to $41.03 per barrel in London after plunging $2.27 the previous session to close at $40.73. Benchmark U.S. crude gained 17 cents to $37.82 per barrel in electronic trading on the New York Mercantile Exchange. The contract lost $1.32 on Monday to close at $37.65.

ANALYST'S TAKE: "Market focus at the moment is the potential deflationary effects of lower oil prices, and the signaling that aggregate demand is weak," said Michael McCarthy, chief strategist at CMC Markets in Sydney. "At some stage however, there may be a collective awakening to the immediate impact lower input prices have on profits," he said in a commentary. "The slide in oil prices is a 'good' fall in that it reflects increasing supply rather than falling demand, and this is not yet reflected in share prices."

WALL STREET: The decline in oil prices rattled investors and pushed down stocks across a range of industries. Seven of the 10 industry sectors in the Standard & Poor's 500 index closing lower. Oil drillers were hit hardest. Chevron and Exxon Mobil both fell nearly 3 percent. The Dow gave up 117.12 points, or 0.7 percent, to 17,730.51. The S&P 500 fell 14.62 points, or 0.7 percent, to 2,077.07. The Nasdaq composite dropped 40.46 points, or 0.8 percent, to 5,101.81.

CURRENCIES: The dollar declined to 123.14 yen from 123.30 yen in the previous session. The euro edged up to $1.0851 from $1.0835.