Asian shares mixed as OPEC talks stalemate, US closed

Asian shares are mixed as oil prices surge after a meeting of oil producing nations was postponed, and little else guided markets after the U.S. Independence Day holiday

Via AP news wire
Tuesday 06 July 2021 07:35
Hong Kong Financial Markets
Hong Kong Financial Markets

Asian shares were mixed Tuesday as oil prices surged after a meeting of oil producing nations was postponed, and little else guided markets after the U.S. Independence Day holiday.

Benchmarks in Japan and South Korea rose, while those in China and Australia declined.

Investors have been trimming holdings of Chinese technology company shares as Beijing tightens oversight of the industry.

Talks among members of the OPEC cartel and allied oil producing countries have broken off in the midst of a standoff with the United Arab Emirates over production levels.

Japan's benchmark Nikkei 225 edged up 0.2% to 28,666.38. South Korea's Kospi added 0.3% to 3,302.59. Australia's S&P/ASX 200 fell 0.7% to 7,264.00. Hong Kong's Hang Seng lost 0.3% to 28,062.49, while the Shanghai Composite slipped 0.7% to 3,515.88.

In energy trading, U.S. benchmark crude rose $1.55 to $76.71 a barrel. Brent crude, the international standard, added 31 cents to $77.47 per barrel.

“Higher energy costs could fan inflationary stresses and add to the case for global central banks to temper emergency stimulus in the months ahead," Harpreet Bhal of ActivTrades said in a commentary.

With oil prices pushing toward $80 a barrel, that “raises the risk of a price war if the conflict escalates, like in March last year," Bhal said.

In Asia, the pandemic remains a major risk that could hinder the recovery in some countries with fresh outbreaks of COVID-19, said Yeap Jun Rong, a market strategist at IG in Singapore.

“This comes as the vaccination rate in Asia has been largely trailing behind other regions, leading to lockdowns being the go-to option to contain virus spreads,” Yeap said in a report.

Worries about health risks are growing ahead of the Tokyo Olympics, which begin later this month with 11,000 Olympic athletes and 4,400 Paralympians entering Japan from more than 200 countries. Tens of thousands of judges, sponsors, dignitaries and media also are attending.

The government is determined to go ahead with the games, despite warnings from medical experts, promising border controls and curbs on spectators to keep the events safe.

While the public remains skeptical, with a majority of people opposed to holding the Games this year, any protests have been muted in this country known for its public order and decorum.

“It’s not even true that the global pandemic is in the past. Yes, media have largely stopped putting it on the front pages: vaccinations are up; cases are down," said a report from RaboResearch.

“However, and very regrettably, it seems another great gamble is underway here too. The vast majority of mankind has not been vaccinated.”

In currency trading, the U.S. dollar slipped to 110.80 Japanese yen from 110.95 yen. The euro cost $1.1892, up from $1.1865.