Bangkok: Asian stock markets posted muted gains Wednesday despite encouraging signs that include falling oil prices, better-than-expected machinery orders in Japan and an overnight climb on Wall Street.
Oil prices fell to near $104 a barrel after Kuwait’s oil minister said that Opec members are in informal talks about raising oil output as the conflict in Libya which sits atop Africa’s largest proven reserves of conventional crude oil continues. In currencies, the dollar rose against the yen and the euro.
Japan’s Nikkei 225 stock average gained 0.5% to 10,574.47, with sentiment lifted after the government announced that machinery orders rose 4.2% in January from the previous month.
The result beat Kyodo news agency’s average market forecast of 2.9% and indicated a recovery in manufacturing. The data includes engines, turbines, heavy electrical machinery and communications equipment but excludes volatile orders for ships and electric power companies.
Hong Kong’s Hang Seng added 0.6% to 23,855.85. But the Shanghai Composite Index reversed course and dropped 0.1% to 2,995.73, while South Korea’s Kospi was up 0.1% at 1,998.06. Australia’s S&P/ASX 200 was off 0.8% at 4,767.80. Benchmarks in Singapore and New Zealand fell.
Falling oil prices hurt energy companies _ state-owned oil giant PetroChina Ltd. was down 0.9%, and CNOOC Ltd., China’s largest offshore oil producer, dropped 0.8%. But airline shares make up recently lost ground, including Cathay Pacific Airways Ltd., up 2.9%, and Korea’s No. 2 Asiana Airlines, up 2%.
Markets remained on edge as the ongoing, violent rebellion against Libyan leader Moammar Gadhafi risked spreading to other crude producers in the region, especially oil powerhouse Saudi Arabia. About 1 million barrels a day of Libya’s 1.6 million capacity has been shut down because of the crisis, and there are fears of uprisings elsewhere in North Africa and the Middle East.
“With so many open fronts, additional oil disruptions can not be ruled out due to contagion risk. For example, unrest in Bahrain is likely to increase the risk of social unrest spreading into Saudi Arabia or Iran,” Bank of America Merrill Lynch said in a report.
“When assuming no contagion, the risk of further disruptions appears slim. However, when assuming some degree of contagion, the probability of further supply disruptions becomes very meaningful,” the report said.
In New York on Tuesday, lower oil prices also helped stocks move higher. The Dow Jones industrial average gained 124.35 points, or 1%, to 12,214.38. The broader S&P 500 rose 11.69, or 0.9%, to 1,321.82.
Financial stocks in the S&P 500 index rose 2.2%, the most of any of the index’s 10 company groups. The Nasdaq composite rose 20.14, or 0.7%, to 2,765.77.
In currencies, the dollar rose to 82.85 yen from 82.65 yen late Tuesday. The euro fell to $1.3888 from $1.3903.
Benchmark crude for April delivery fell 81 cents to $104.21 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost 42 cents to settle at $105.02 a barrel Tuesday. Oil prices have dropped back after nearly hitting $107, the highest level since Sept. 26, 2008, on Monday.