business
Asian shares retreat on profit-taking, oil eyed
MSCI's broadest index of Asia-Pacific shares outside Japan fall more than a percent with Japan's Nikkei and South Korea's KOSPI falling more than a percent each. – Reuters file pic, March 8, 2016. Asian shares fell today as investors took profits after a month-long rally and investors grew wary of the market's near-term prospects ahead of major central bank meetings.
Led by China, MSCI's broadest index of Asia-Pacific shares outside Japan fell more than a percent. Japan's Nikkei and South Korea's KOSPI fell more than a percent each.
"We have seen a big move in markets in a very short period of time and investors are calling time ahead of the ECB and the Fed meetings in the coming days," said Kay Van-Petersen, global macro strategist at Saxo Bank in Singapore.
The European Central Bank is widely expected to ease at Thursday's policy review, but there is a lot of uncertainty about how far it would go. Meanwhile, ahead of a US Federal Reserve policy meeting, fed fund futures were barely pricing in one more hike this year.
Additionally, China's February exports data released in morning trade disappointed analysts' expectations, falling 25.4% from a year earlier, while imports fell by 13.8%.
Still, risk sentiment was broadly upbeat as the impressive rally in commodities markets spilled over into an array of assets such as the high-yielding Australian dollar and mining giant Glencore, which is up 5% and 35%, respectively in a week.
Some investors talked about a potential bottom being formed in the commodity markets as large bearish bets are unwound and hopes of more coordinated measures from oil-producing countries to stem tumbling prices grew.
Brent crude futures jumped to as high as US$41.04 (RM167) per barrel yesterday, extending their recovery from a 12-year trough of US$27.10 hit in January. US crude futures also rose to US$38.11 per barrel, its highest since early January.
Further improving the mood in the battered commodity sector, spot iron ore price surged almost 20%, hitting a near nine-month high on the back of China's plans to boost short-term output.
Ecuador's Foreign Minister, Guillaume Long, said his government will host a meeting in Quito on Friday with Venezuela, Colombia, Ecuador and Mexico "to reach consensus over oil, especially prices."
The currency hardly moved in response to data showing Japan's economy shrank an annualised 1.1 percent in October-December, slightly less than an initial estimate of a 1.4 percent contraction
The dollar's weakness helped to underpin gold, which hit a 13-month high of $1,280 per ounce on Monday and last stood at $1,266. – Reuters, March 8, 2016.
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