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Asian markets pushed by US equities record, pulled by oil slide

Monday 02.55 BST

Overview

Asian stocks were mixed as softness in energy prices offset another record high close on Friday for the S&P 500.

Hot topic

Oil prices came off the boil on Monday following a week of big moves as Opec members agreed last Thursday to extend production cuts to March of next year to address a global supply glut.

Brent crude, the international benchmark, was down 0.1 per cent at $52.10 a barrel while WTI was down 0.2 per cent at $49.72. Trading on Friday was choppy before Brent closed 1.4 per cent higher, recovering from a 4.6 per cent drop in the previous session when traders “sold the fact” upon the signing of the Opec agreement.

Still, the energy sectors of the Topix and Hang Seng were the second-worst performers in Japan and Hong Kong, while energy stocks in Australia were also softer.

Equities

Japan’s Topix was up 0.3 per cent. Toshiba was up 3.1 per cent and a top performer among well-known names on local media reports that Broadcom was preparing a ¥4tn bid for the company’s prized memory chip unit.

Hong Kong’s Hang Seng was off 0.1 per cent ahead of a public holiday Tuesday. Lenovo fell 0.8 per cent, the worst performer in the benchmark, continuing to suffer in the wake of disappointing quarterly earnings last week.

Australia’s S&P/ASX 200 dropped 0.4 per cent, weighed down by heavyweight bank stocks while iron ore miners BHP, Rio Tinto and Fortescue Metals Group retreated as the iron ore price hit its lowest since before the US presidential election in November.

China’s markets were closed for a public holiday.

Commodities

Iron ore futures for September delivery on China’s Dalian Commodity Exchange ended last week 4.8 per cent lower at Rmb451.5 ($65.81) per tonne in their third-biggest weekly drop of 2017. It was the lowest level for the contract since November 8.

Prices are down 11.3 per cent so far this year and down 32.9 per cent since this year’s high of Rmb673 in late February. Mainland markets were closed on Monday for holiday.

Gold was up 0.1 per cent at a four-week high of $1,267.56 an ounce.

Forex

The dollar index, a measure of the US currency against a basket of global peers, was fractionally higher at 97.469 and on track for its first three-day win streak in a fortnight. The greenback gained on Friday after US first-quarter GDP growth was revised higher by more than expected.

Other currencies were mixed. The Japanese yen was a touch lower at ¥111.34 per dollar, while the Australian dollar was flat at $0.7449.

The UK pound was 0.1 per cent firmer at $1.2818, after stumbling 1.1 per cent on Friday as polls in the lead-up to next month’s general election showed the Conservatives had lost ground to Labour.

The euro was 0.1 per cent lower at $1.1168.

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