Asia Stocks at Mercy of Post-Doha Oil Moves
Futures pointed to weaker Asian markets on Monday, with oil in focus
after an summit in Doha of top producers ended without an agreement.
Angus
Nicholson, a market analyst at IG, cautioned,"Given the strong
correlation between the oil price and equities, Asian markets are not
looking like they will have a good start to the week."
Australian SPI futures were down 0.1 percent at 5,142, compared to the ASX 200 (.AXJO)'s last close at 5,157.48.
Nikkei futures in Chicago were down 1.11 percent at 16,465, while Osaka futures fell 0.89 percent to 16,610. The Japanese benchmark index (.N225) finished at 16,848.03 on Friday.
Oil prices had tumbled more than 5 percent in early Asian hours, with U.S. crude futures down 5.33 percent at $38.21 while global benchmark Brent fell 5.61 percent at $40.68 as of 7:02 a.m. HK/SIN time.
The commodity sold off after the meeting between the world's largest oil producing countries in Doha failed to produce a deal to freeze output and boost sagging crude prices.
Analysts said the Doha outcome was largely to be expected, with some pointing to the geopolitical situation in the region.
In
his morning note, Nicholson said, "With Saudi Arabia fighting proxy
wars with Iran in Yemen and Syria/Iraq, it is understandable that they
had little inclination to freeze their own production and make way for
newly sanctions-free Iran to increase their market share."
U.S. stocks closed lower Friday, with the Dow Jones industrial average (.DJI) down 0.16 percent, the S&P 500 (.SPX) off by 0.1 percent and Nasdaq (.IXIC) composite lower by 0.16 percent.
