Asian markets go up, energy firms recover as oil stabilizes

AFP and AP

HONG KONG — World stock markets were mostly higher Tuesday but gains were kept in check by a cloudy outlook for the global economy.

In early European trading, France’s CAC-40 was up 0.6 percent at 4,402.22 and Germany’s DAX gained 0.2 percent to 9,983.22. Britain’s FTSE 100 jumped 1 percent to 6,723.19. Wall Street was set to recover some of the ground it lost Monday. Dow futures were up 0.4 percent at 17,821 and S&P 500 futures gained 0.3 percent to 2,057.20.

Markets were absorbing a number of unsettling trends including further weakness in China’s economy, weak holiday retail sales in the U.S. and the slump in oil prices. Faltering recoveries in Europe and Japan add to the picture of an anemic global economy. Meanwhile, the drop in oil prices from above US$100 a barrel to below US$70 is putting stress on oil-exporting nations, Russia particularly, which is already under strain from Western sanctions over its backing of the rebellion in eastern Ukraine.

Asian shares rose Tuesday, with energy firms clawing back some losses as oil prices recovered from multi-year lows, while Shanghai surged to a three-year high on hopes for more Chinese government easing. The Russian ruble strengthened slightly against the dollar after suffering its worst one-day fall in 16 years, battered by falling crude prices and Western sanctions over Ukraine. Tokyo added 0.42 percent, or 73.12 points, to end at a seven-year high of 17,663.22. Analysts said dealers were broadly unfazed by a decision from Moody’s ratings agency to downgrade Japan’s credit rating. Sydney jumped 1.41 percent, or 73.6 points, to close at 5,281.3, boosted by the rally in energy firms after their huge losses in the previous two sessions. Seoul rose 0.61 points to 1,965.83. Shanghai soared 3.11 percent, or 83.39 points, to 2,763.55 �X its highest since July 2011 �X and Hong Kong rose 1.23 percent, or 286.85 points, to 23,654.30. Oil prices edged down in Asia but were still well off their five-year lows touched on Monday before recovering on bargain-buying. Prices have plummeted since Thursday’s decision by the OPEC oil cartel to maintain existing output levels despite a global supply glut.

While prices are edging down again, energy giants enjoyed some buying interest after a painful sell-off on Friday and Monday.

However airlines, whose main cost is fuel, suffered losses after recent advances. Cathay Pacific in Hong Kong dipped 1.5 percent and Seoul-based Korean Airlines shed 2.3 percent. Shares in Hong Kong and Shanghai were boosted by hopes that Monday’s weak index of manufacturing activity in China will prompt the country’s leaders to unleash fresh stimulus measures, after the central bank last month announced a shock interest rate cut. Wall Street provided a limp lead as U.S. investors ran for the sidelines Monday after the Thanksgiving holiday weekend saw disappointing sales on the key Black Friday retail day, which officially kicks off the Christmas shopping season.

The Dow eased 0.27 percent, the S&P 500 fell 0.68 percent and the Nasdaq sank 1.34 percent. Gold was at US$1,202.76 an ounce Tuesday, compared with US$1,156.80 late Monday.