Asian Stocks Down as Oil Rises on Tight Supply Concerns
2022.06.28 08:27
By Zhang Mengying
Investing.com – Asia Pacific stocks were mostly down on Tuesday morning after Wall Street fell and oil prices rose on tight supply concerns.
Japan’s Nikkei 225 edged up 0.16% by 10:31 PM ET (2:31 AM GMT).
South Korea’s KOSPI fell 0.30%.
In Australia, the ASX 200 rose 0.23%.
Hong Kong’s Hang Seng was down 1.01%
China’s Shanghai Composite was down 0.49% while the Shenzhen Component was down 0.38%. To boost the recovery from COVID-19 disruption, People’s Bank of China Governor Yi Gang vowed to maintain the supportive monetary policy.
The S&P 500 fell 0.30%, tech-heavy Nasdaq 100 fell 0.81%. U.S. Treasuries yield hovered around 3.19%.
Crude rose past $110 per barrel as supply remained tight over lost Russian supply amid sanctions on Russian oil exports. Adding to the supply concerns, Libya and Ecuador flagged potential output cuts on political unrest.
The Group of Seven (G7) leaders are set to discuss the means to tackle rising energy prices. They are considering a possible price cap on Russian crude and oil product exports at the same time while reducing the damage to economies.
“A seam of tight supply news bolstered the (oil) market,” Commonwealth Bank of Australia analysts said in a note.
“Political unrest might curtail supply from a couple of second-tier producers, Ecuador and Libya. And then there’s the G7’s proposed price cap on Russian oil.”
Earnings revisions are a risk with the US economy set to slow next year, though China emerging from COVID strictures could act as a buffer for the world economy, according to Bloomberg, quoting Lorraine Tan, Morningstar director of equity research.
“You got a US slowdown in 2023 in terms of growth, but you have China hopefully coming out of its lockdowns,” Tan told Bloomberg.
The European Central Bank (ECB) President Christine Lagarde, U.S. Federal Reserve Chair Jerome Powell, the Bank of England Governor Andrew Bailey, and Cleveland Fed President Loretta Mester due to speak at the ECB event this Wednesday.
In Asia-Pacific, China’s purchasing managers index is due on Thursday.
