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Asian Stocks Skid as Oil Woes Sap Sentiment

Asian Stocks Skid as Oil Woes Sap SentimentAsian Stocks Skid as Oil Woes Sap Sentiment

Asian stocks stumbled on Wednesday after weaker crude oil prices took a toll on Wall Street, while the euro kept big gains after enjoying a boost from robust German economic growth.

Spreadbetters tipped opening losses for Britain’s FTSE of 0.1%, a 0.25% decline for Germany’s DAX and France’s CAC is seen down 0.15%, Reuters reported.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.6%. China’s Shanghai index was down 0.55%, Australian stocks dropped 0.6% and South Korea’s KOSPI shed 0.4%. Japan’s Nikkei lost 1.5%.

“The decline by US equities led by energy shares is having a knock-on effect, dampening sentiment in sectors related to energy and industry,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.

“Broadly speaking equities had enjoyed an almost uninterrupted run for the past few months, so we are seeing a bit of a correction finally emerging.”

Lifted by steady economic growth, supportive monetary policies and solid corporate earnings, global equities have rallied hard, with those in the United States, Germany and South Korea scaling record heights recently, while Japan’s Nikkei climbed a 26-year peak.

BofA Merrill Lynch’s November fund manager survey found that a record high 16% of respondents are taking above normal levels of risk in their investment.

The euro stood little changed at $1.178 after rising 1.1% overnight to a 2-1/2-week high of $1.180 as data showed Germany’s economy shifted into a higher gear in the third quarter.

Pressured by the euro’s surge, the dollar index against a basket of six major currencies lost about 0.7% overnight. It last stood flat at 93.870. The greenback was 0.2% lower at 113.230 yen after pulling back from a high of 113.910 the previous day.

The yen as well as Japan’s equity and bond markets showed little reaction to Wednesday’s GDP data. Japan’s economy grew for the seventh straight quarter during the July-September period, although this was tempered somewhat as private consumption declined for the first time since the last quarter of 2015.

Canada’s currency stood at C$1.274 per dollar after weakening to a one-week low of C$1.277 overnight. The Aussie fell about 0.7% to a four-month trough of $0.757.

US crude futures were down 1.1% at $55.07 per barrel and on track for their fourth day of losses. Brent lost 1.3% to $61.42 per barrel.

 

 

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