BEIJING, China – Asian stock markets fell for a second day Thursday after declines in prices of oil and other commodities pulled Wall Street lower.
KEEPING SCORE: The Shanghai Composite Index lost 0.5 per cent to 2,994.93 points and Hong Kong’s Hang Seng tumbled 1.2 per cent to 20,373.54. Sydney’s S&P ASX 200 fell 1.1 per cent to 5,085.60 and Tokyo’s Nikkei 225 retreated 0.3 per cent to 16,956.11. Seoul’s Kospi shed 0.3 per cent to 1,989.22 and benchmarks in Taiwan, Singapore and Jakarta also declined. Indian markets were closed for a holiday. New Zealand advanced.
U.S. INTEREST RATES: Traders reconsidered risk levels after a member of the Federal Reserve’s rate-setting team was quoted as saying it should consider raising interest rates at its next meeting. James Bullard, president of the St. Louis Federal Reserve Bank, pointed to a broadly unchanged economic outlook and said a case could be made for action next month if the next round of jobs data exceeds official targets.
ANALYST’S TAKE: “Clear messaging from U.S. Federal Reserve board members that U.S. interest rates will rise faster than current market expectations has forced the U.S. dollar higher. Shares fell in a re-pricing of interest rate risk,” said Michael McCarthy of CMC Markets in a report. “Gold slumped and industrial commodities tanked after a higher than expected weekly build in oil stocks.”
OIL: Overnight, the U.S. Energy Information Administration reported that crude stockpiles rose 9.4 million barrels last week in further confirmation of substantial supplies. That helped to push benchmark U.S. crude below $40.
WALL STREET: Falling commodity prices pulled U.S. stocks lower, nudging the Standard & Poor’s 500 index into the red for the year. Energy and mining companies led the decline, while consumer staples and utilities stocks bucked the broader downward trend. The Dow Jones industrial average fell 79.98 points, or 0.5 per cent, to 17,502.59. The S&P 500 lost 13.09 points, or 0.6 per cent, to 2,036.71. The Nasdaq composite dropped 52.80 points, or 1.1 per cent, to 4,768.86.
ENERGY: Benchmark U.S. crude shed 12 cents to $39.67 per barrel in electronic trading on the New York Mercantile Exchange. The contract plunged $1.66 on Wednesday to close below $40 at $39.79. Brent crude, used to price international oils, gained 4 cents to $40.51 in London. It lost $1.32 in the previous session to $40.47.
CURRENCY: The dollar gained to 112.83 yen from Wednesday’s 112.44. The euro edged down to $1.1175 from $1.1181.