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Oil slide weighs on Asia energy shares

Wednesday 02:30 BST

Overview

Asian bourses were mixed but relatively subdued following negative leads from the US and UK as investors returned from public holidays, while sterling slid on pollster modelling suggesting Britain could face a hung parliament.

Hot topic

The pound was under pressure following modelling suggesting a growing chance of the UK suffering a hung parliament at next month’s election.

Sterling was the worst performing major currency, down 0.3 per cent in Asia at $1.2823 after a YouGov model showed Prime Minister Theresa May’s Conservative party could lose 20 seats in the June 8 vote, while Jeremy Corbyn’s Labour party could pick up 30 seats, leaving neither side able to claim a majority victory.

The pound gained 0.2 per cent in Tuesday’s session. The currency had closed above $1.30 on May 19 and 20 for the first time since the end of September.

Equities

Japan’s Topix was off 0.2 per cent, with the energy sector down 2 per cent after a slide in oil prices.

Energy stocks were down 0.7 per cent in Australia but the declines were offset by a second day of gains for banks following news the government would delay the due date for the first payment from lenders for its A$6.2bn bank tax. The S&P/ASX 200 was up 0.3 per cent.

Mainland Chinese stocks were trading for the first time since Friday, with the Shanghai Composite and tech-focused Shenzhen Composite each up 1.1 per cent.

The Hang Seng China Enterprises Index, a gauge tracking mainland companies listed in Hong Kong, was up 0.7 per cent following data showing China’s manufacturing sector expanded in May in line with expectations. The HSCEI tends to be more sensitive to Chinese economic data than its cousins across the border.

Hong Kong’s benchmark Hang Seng index was up 0.3 per cent as the territory’s markets reopened after Tuesday’s public holiday.

UK stocks retreated 0.3 per cent following a long weekend, while the S&P 500 eased 0.1 per cent from Friday’s record high, with investors sitting Monday out due to the Memorial day public holiday. A highlight of Tuesday’s session was Amazon shares closing above $1,000 for the first time.

Forex

The euro was down 0.1 per cent at $1.1173. The currency retreated after finishing 0.2 per cent higher on Tuesday, momentarily brushing off dovish comments from Mario Draghi, president of the European Central Bank, that he was “firmly convinced” of the ECB’s need to stick with its quantitative easing programme.

The Japanese yen was 0.1 per cent weaker at ‎¥‎110.92 per dollar after a three-session winning streak that on Tuesday took it to its strongest level in a fortnight. Data on Wednesday showed that industrial production growth picked up in April to its strongest pace in almost three years, though not by as much as economists expected.

The dollar index, a measure of the US currency against a basket of global peers, was up 0.2 per cent at 97.422.

The Australian dollar dropped 0.1 per cent to $0.7456 after data showed private sector credit grew in line with expectations.

Commodities

Brent crude oil, the international benchmark, was down 0.2 per cent at $51.72 a barrel, while West Texas Intermediate eased 0.4 per cent to $49.43.

Gold was down 0.1 per cent at $1,262.03 an ounce, extending Tuesday’s 0.5 per cent decline.

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