By Ese Erheriene
Kyodo via Reuters
Equity markets in Asia struggled for direction early Thursday after underwhelming overnight moves in Europe and the U.S., as investors adopted a collective wait-and-see attitude.
Market participants are especially concerned about the repercussions of North Korea’s missile launch earlier this week, in addition to a Group of 20 meeting in Germany and Friday’s U.S. jobs report.
Given those factors, markets are “quite contained so far,” said Arthur Kwong, head of Asia-Pacific equities at BNP Paribas Investment Partners.
Most stock indexes in Asia have stayed close to Wednesday’s closing levels. Taiwan’s Taiex was recently the only benchmark that was more than 0.3% off yesterday’s finish; it dropped 0.6%.
Oil prices fell 4% overnight. That put an end to what had been the longest uptrend in at least five years for U.S. and global crude benchmarks. They rose for eight consecutive sessions, following five straight weeks of declines.
“Oil prices collapsed as U.S. markets reopened, with investors taking a glass-half-empty approach to events in the market,” ANZ Research analysts said.
Australia’s energy stock subindex was down 0.6%, helping to push the S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -0.34% 0.3% lower. Oil prices also hit the Nikkei /zigman2/quotes/210597971/delayed JP:NIK -0.44% , which was down 0.3% as distributor JXTG /zigman2/quotes/208590403/delayed JP:5020 +0.84% slid 2.6% and explorer Inpex /zigman2/quotes/206689846/delayed JP:1605 -2.66% fell 1%.
In Hong Kong, major Chinese oil companies PetroChina /zigman2/quotes/204979431/delayed HK:857 -4.17% and Cnooc /zigman2/quotes/203421416/delayed HK:883 -5.57% fell about 1%. But the Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -1.60% was slightly higher as insurers continued to gain.
Oil rebounded in Asian trading Thursday. A U.S. industry group said oil and gas inventories fell last week at a higher level than what analysts expect will be revealed by government data later Thursday. Futures were recently up 0.5%.
And in the debt market, yields for Japanese government bonds were higher on further signs the Federal Reserve will start trimming its balance sheet. The June FOMC minutes out overnight, combined with recent indications from officials, showed a growing likelihood that the central bank could unveil a runoff plan in September.
Thirty-year JGB yields earlier rose to 0.88%, their highest point since Feb. 23, while the 10-year yield was up 0.01% at 0.09%.