- Highest U.S. oil supplies in 86 years drag crude prices lower
- Japan's Topix index falls 1.5%, paring weekly rally to 8%
Asian stocks fell, paring the biggest weekly rally since December 2011, as the yen strengthened and a buildup in oil supplies dragged crude prices and energy producers lower.
The MSCI Asia Pacific Index declined 0.7 percent to 119.49 as of 1:02 p.m. in London. The gauge rose 5.8 percent this week after sinking to a 3 1/2-year low last week. Speculation that the global selloff had gone too far and that central banks will take steps necessary to bolster markets lifted shares early in the week. That optimism faded as concerns over moves in crude and the yen resurfaced.
“Sentiment on the oil market has been a key macro driver for stock-market sentiment recently,” said Ric Spooner, Sydney-based chief market analyst at CMC Markets. “Concerns about the potential for credit-market problems in the event of a lower-for-longer oil scenario are near the top of a fairly long list of macro factors worrying investors at the moment.”
Even after this week’s gains, the MSCI Asia Pacific Index has lost 9.4 percent this year. Since the start of January, a combination of tumbling oil prices, concern about the slowdown in Asia’s largest economy and a selloff in bank stocks sent a measure of global stocks into a bear market for the first time in five years.
The Topix index declined 1.5 percent after the yen rose Thursday. A strengthening currency dents the earnings outlook for exporters. Even with Friday’s losses, the benchmark gauge finished the week with a gain of 8 percent, the most since 2009, amid optimism the Bank of Japan will come forth with more monetary stimulus.
South Korea’s Kospi index added 0.4 percent. The won touched a 5 1/2-year low against the greenback before paring its fall as the central bank and finance ministry said recent moves have been excessive and they would take measures to combat “herd behavior" in the foreign-exchange market.
Hong Kong’s Hang Seng Index lost 0.4 percent and the Hang Seng China Enterprises Index declined 0.7 percent. Casino operators fell after MGM Resorts International posted a surprise fourth-quarter loss. MGM China Holdings Ltd., the company’s Hong Kong-listed unit, sank 7.8 percent, while Sands China Ltd. fell 3.1 percent to lead losses on the Hang Seng measure.
The Shanghai Composite Index slipped 0.1 percent. China’s central bank will boost the amount of reserves that must be locked away by some banks that recently increased lending too quickly, people familiar with the matter said. Regional banks are among those lenders affected by the increase, according to the people, who asked not to be identified because the move wasn’t made public.
New Zealand’s S&P/NZX 50 Index rose 0.5 percent. Australia’s S&P/ASX 200 Index fell 0.8 percent and Singapore’s Straits Times Index was little changed.
E-mini futures on the Standard & Poor’s 500 Index slid 0.3 percent. Energy producers led losses on the U.S. equities gauge Thursday with investors betting on defensive equities less tied to economic growth, such as utility and telephone stocks. The gauge fell 0.5 percent after rising for three days.
Crude stockpiles rose by 2.15 million barrels to 504.1 million last week, according to the U.S. Energy Information Administration. Imports climbed 11 percent, the biggest increase since April.