Asian stocks and US futures took a hit as oil prices dropped another 14%
on Tuesday, despite optimistic rises in US stocks as states prepare to
re-open.Oil futures slumped after the largest U.S. oil exchange-traded
fund said it would sell all its front-month crude contracts to avoid
further losses as prices collapse.MSCI's broadest index of Asia-Pacific
shares outside Japan was down 0.3%. Shares in China fell 0.7% and South
Korean shares fell 0.22%.U.S. crude skidded 14.24% to $10.96 a barrel
while Brent crude fell 4.05% to $19.18 per barrel.Visit Business
Insider's homepage for more stories.To get more news about
WikiFX, you can visit wikifx official website.
TOKYO/NEW YORK (Reuters) - Asian shares and U.S. stock futures dipped
into the red on Tuesday, erasing earlier gains as a renewed decline in
oil prices overshadowed optimism about the easing of coronavirus-related
restrictions seen globally.MSCI's broadest index of Asia-Pacific shares
outside Japan was down 0.3%. Shares in China fell 0.7% and South Korean
shares fell 0.22%.Oil futures slumped after the largest U.S. oil
exchange-traded fund said it would sell all its front-month crude
contracts to avoid further losses as prices collapse.Some investors are
hoping the worst may be over for the world economy as more countries
allow businesses to re-open, but others see reasons to remain cautious,
especially as a coronavirus vaccine has yet to be developed.
“We are less optimistic and expect a slower recovery in the world
economy,” Commonwealth Bank of Australia said in a research note.“The
risk of reintroducing restrictions is a risk to market participants'
optimistic outlook for a quick resumption of normal economic
activity.”All three major U.S. stock averages advanced on Monday and are
all now within 20% of their record closing highs reached in
February.The benchmark S&P 500 is on track for its best month since
1987, after trillions of stimulus dollars helped U.S. equities claw back
much of the ground lost since the coronavirus crisis brought the
economy to a grinding halt.
But some analysts believe gains may be limited unless there is progress in finding treatments for the disease.
From Italy to New Zealand, governments announced the easing of
restrictions, while Britain said it was too early to relax them there.
New York state is not expected to reopen for weeks..Oil prices weakened
again on persistent concerns about oversupply and a lack of storage
space. The front-month contract was trading at lower-than-usual volumes
on Monday as traders moved to later months in futures contracts.U.S.
crude skidded 14.24% to $10.96 a barrel while Brent crude fell 4.05% to
$19.18 per barrel.
Shares of United States Oil Fund LP , the country's largest crude ETF,
fell more than 16% on Monday, after it said it would sell all of its
front-month crude contracts to avoid a repeat of the heavy losses
suffered last week.The U.S. dollar and the euro were little changed as
traders refrained from taking big positions before a Federal Reserve
policy decision due on Wednesday and a European Central Bank (ECB)
meeting Thursday.The Fed has already announced a raft of measures to
lessen the economic blow from the coronavirus pandemic and is expected
to stay on hold this week.The ECB is likely to extend its debt purchases
to include junk bonds and provide a backstop for corporate financing.
Major central banks have responded to the economic slump caused by the
coronavirus by slashing interest rates, buying more government debt,
and taking steps to increase lending to small companies.Elsewhere in
currencies, the Australian dollar traded near a six-week high of $0.6472
as investors continued to cheer the country's progress in containing
the coronavirus.Gold, a safe-haven often bought during times of
uncertainty, fell for a third consecutive trading session in signs of
improving risk appetite.(Reporting by Stanley White in Tokyo and
Chibuike Oguh in New York; Editing by Sam Holmes)
The Wall