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Oil dive fuels run on energy firms in Asia stock rout

Dec 14 2015 07:16

Hong Kong - Energy-linked firms took another battering in Asia on Monday morning, leading losses on regional markets as oil prices sank to fresh seven-year lows, with warnings of further falls to come for the commodity.

However, while companies that rely on fossil fuels to drive profits were taking a hit, analysts said the weekend climate deal was unlikely to have had a major impact on their shares for now.

Adding to the unease on trading floors is this week's Federal Reserve policy meeting that is widely expected to see US interest rates lifted for the first time since 2006.

Crude has slumped more than 12% since the OPEC oil producers' group on December 4 opted against cutting its output levels, despite anaemic demand, a global economic malaise and a growth slowdown in major consumer China.

And with the commodity falling further on Monday, regional energy companies tumbled. In Sydney BHP Billiton shed 2.2%, Rio Tinto was 1.5% lower and Santos lost 3.4%.

Elsewhere, Hong Kong-listed CNOOC sank 2.8% and Sinopec fell more than 2%. Inpex dived 3.7% in Tokyo while JX Holdings was more than 3% off.

However, CMC Markets chief analyst Ric Spooner said there were too many other negatives to suggest Saturday's agreement to limit global warming to below two degrees Celsius (3.6 degrees Fahrenheit) over pre-industrial levels had any real impact.

Hong Kong's SCMP sold

"It's difficult to strip out what impact there has been, if any, given the day already had so many negatives," he said. "That said, it's possible that investors will increasingly start to look to the medium- and long-term future of the oil and gas sector."

Tokyo's Nikkei led Asian markets down, shedding 2.5% by lunch, while Hong Kong was off 1.8%, Sydney slipped 1.3% and Shanghai gave up 0.3%.

The losses followed another sell-off on Wall Street, where all three main indexes ended in the red.

Hong Kong-listed shares in SCMP Group were suspended as it was announced Chinese Internet giant Alibaba will pay US$266m for the city's South China Morning Post newspaper.

The Chinese firm announced the purchase on Friday, saying it would use its "digital expertise" to provide "comprehensive and insightful news and analysis of the big stories in Hong Kong and China".

SCMP Group also owns the Hong Kong editions of magazines Esquire, Elle, Cosmopolitan and Harper's Bazaar.

Also in Hong Kong, conglomerate Fosun International plunged more than 11% as it resumed trading after it said last week its head was cooperating with authorities over an investigation, but there were no details about what the inquiry was in connection with.

The firm's billionaire chairperson Guo Guangchang, dubbed "China's Warren Buffett", reappeared on Monday after he went missing Thursday.

equities  |  markets  |  asian markets


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