Asian markets beat retreat on profit-taking, oil slump

AFP and AP

HONG KONG/BEIJING–Asian markets retreated on profit-taking Tuesday after a healthy run-up over the past week, with Shanghai tanking more than five percent, while energy firms took a hiding as oil prices hit fresh five-year lows. France’s CAC-40 fell 1 percent to 4,330.61 and Germany’s DAX lost 0.8 percent to 9,934.17. Britain’s FTSE 100 shed 1 percent to 6,603.34. Wall Street looked set for further declines. Futures for the Dow Jones industrial average and Standard & Poor’s 500 both fell 0.3 percent. On Monday, the Dow fell 0.6 percent, the S&P lost 0.7 percent and the Nasdaq composite dropped 0.8 percent.

Sydney-listed energy firms including Santos and BHP Billiton were hammered as crude continued to be bid down owing to an oversupply in world markets. Tokyo dipped 0.68 percent, snapping a seven-session winning streak. The Nikkei fell 122.26 points to 17,813.38. Sydney tumbled 1.68 percent, or 90.0 points, to close at 5,282.7 and Seoul gave up 0.40 percent, or 8.00 points, to 1,970.95. Shanghai sank 5.43 percent, or 163.99 points, to 2,856.27 after enjoying a stellar performance since last month when China slashed interest rates unexpectedly. Hong Kong lost 2.34 percent, or 561.84 points, to close at 23,485.83, capping a three-day rally.

Traders took their cash off the table after running up impressive gains so far this month, helped by a string of upbeat U.S. data and expectations China will unveil more economy-boosting measures. Oil prices fell to fresh five-year lows, battered by OPEC’s decision last month to maintain its output levels despite a global supply glut. Economic weakness in China, Japan and the eurozone and the strong dollar also pushed down prices.

U.S. benchmark West Texas Intermediate for January delivery fell 26 cents to US$62.79 while Brent eased 69 cents to US$65.50. Energy firms bore the brunt of the pain, with Sydney-listed BHP down 4.05 percent at a five-year low and Santos off 7.23 percent to end at levels not seen for a decade.

In Hong Kong CNOOC shed 4.37 percent and PetroChina was 3.29 percent lower. ��This has contributed to intensifying the hand-wringing in the market over the potential for massive oversupply in 2015,�� Greg Priddy, head of energy and resources at Eurasia Group, said in a report, according to Dow Jones Newswires. Shanghai Slumps

Shanghai, which on Monday broke the 3,000 barrier for the first time in three years, was hammered by profit-taking and news that China’s securities clearing house had tightened the use of corporate bonds as collateral for short-term financing.

The move is part of an attempt to rein in risky debt issuances from struggling companies and local governments.