Asian shares take cue from Nasdaq record

Saturday, 25 April 2015 00:00 - - {{hitsCtrl.values.hits}}

An index of Asian shares rose to fresh seven-year highs on Friday, on track for a weekly gain after Nasdaq rose to a record, while the dollar stuck to recent ranges after more lacklustre US economic data. MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.2%, after marking its highest level since January 2008. For the week, it added 0.4%. Japan’s Nikkei stock index was down 0.7% after hitting a 15-year peak on Thursday, but was still up nearly 2% for the week. “Since the index has risen too fast, a short-term correction is likely,” said Hikaru Sato, a senior technical analyst at Daiwa Securities. On Wall Street, the Nasdaq pushed above its previous record set in March 2000, the height of the dot.com boom. But week readings on US jobless claims, manufacturing and home sales contrasted with the shining share market performance. A larger-than-expected 11.4% drop in new home sales in March, together with disappointing global factory data, rekindled doubts about whether the economy is strong enough for the Federal Reserve to raise interest rates this year as widely expected, and gave investors an excuse to reduce long positions in the dollar. “Clearly the market is pushing back expectations of a Fed hike,” Mitul Kotecha, head of FX strategy, Asia-Pacific for Barclays in Singapore, said on a visit to Tokyo this week. “It’s certainly something that clients are nervous about.” While a June increase in US interest rates looks unlikely, he said the Fed is still poised to hike later this year depending on economic data. “Any weakness in the dollar’s ascent will be temporary, with strengthening likely toward the year-end,” he said. The dollar was steady on the day at 119.56 yen, below its overnight high of 120.10 yen. The greenback bought $1.0789 against the euro, which was down about 0.3% on the day but above overnight its low of $1.0666, after rebounding on signs that Greece was making progress in securing fresh funds. German Chancellor Angela Merkel said on Thursday everything must be done to prevent Greece running out of money before it reaches a cash-for-reform deal with its international creditors. Oil prices were on track for weekly gains but came off the overnight highs after Saudi Arabia and its allies continued bombing missions in Yemen that raised concerns about the security of Middle East oil supplies. Brent crude LCOc1 touched a high of $65.58 on Thursday, its highest since December, but was last down 0.5 percent on the day at $64.56 a barrel. U.S. crude CLc1 was down about 0.6% at $57.40. Gold was poised for its third straight weekly drop amid uncertainty over when the Fed Reserve will begin to hike rates. Spot gold was slightly lower on the day at $1,191.20 an ounce.

Oil prices edge down from 2015-highs, but set for weekly gain

Oil pump jacks are seen next to a strawberry field in Oxnard, California 24 February, 2015 SINGAPORE (Reuters): Oil prices held steady on Friday near 2015-highs reached the session before, remaining on track for weekly gains after renewed air strikes in Yemen stoked concerns on the security of Middle East oil shipments. Crude prices on both sides of the Atlantic have surged almost $10 a barrel this month amid rising tension in the Middle East, while slowing U.S. production growth and signs of stronger global demand have also provided support. Brent crude for June delivery had climbed 22 cents to $65.09 a barrel by 0706 GMT (3.06 a.m. ET), after settling up $2.12 on Thursday. The benchmark touched its highest since Dec. 10 at $65.58 on Thursday. U.S. crude for June delivery rose 8 cents to $57.82 a barrel, after settling up $1.58. The front-month contract hit a 2015-high of $58.41 on Thursday and is on course for its sixth straight weekly gain. The rise in futures prices over the last month shows a growing disconnect between oil producers and Wall Street over when slumping oil prices will recover, with the financial community betting that the oil price cycle may turn more quickly than the industry expects. Equity markets are already looking for the upside, said Scott Key, chief executive of IHS. Meanwhile, producers are bracing for oil to remain at about $60 for as long as the next five years or so. One can hope for $75 oil but I think one has to plan for a lower price, said Stephen Chazen, CEO of Occidental Petroleum Corp. He expects oil to remain at $60. On Friday, Societe Generale raised its 2015 average price forecast for Brent by $4.33 to $59.54 a barrel and for U.S. crude by $4.28 to $53.62 a barrel. The spike in prices on Thursday came as warplanes from a Saudi-led coalition pounded Houthi militiamen and military bases with at least 20 air strikes throughout Yemen, despite Riyadh saying earlier it was winding down its campaign. The Bab el-Mandeb Strait on Yemen’s southern coast controls access to the Red Sea, Suez Canal and the ports of western Saudi Arabia, the world’s biggest crude exporter. Saudi Arabia is producing at near record levels at above 10 million barrels per day as it seeks to retain market share and force higher-cost producers to cut supply. Estimates by the most watched government forecasters put OPEC production at around 2 million barrels per day above demand for its oil in the first half of 2015. International oil prices are also drawing support from a weaker dollar after underwhelming U.S. economic news. A softer greenback makes dollar-denominated commodities like oil cheaper for holders of other currencies.