Hopes for a deal to hold crude oil production at January's level were scuppered by Saudi Arabia's insistence that Iran, which had refused to participate in the freeze as it rebuilds oil exports after years of sanctions, should be part of any agreement. The failure of the Doha talks to agree anything serves to underscore the ongoing global supply/demand imbalance. Brent crude, the international benchmark, is off its session lows but still down 5.7% at $40.63 a barrel, while West Texas Intermediate, the US marker, is 5.5% lower at $38.13. Prices had been down as much as 7% and 6.8%, respectively.
Since hitting a 12-year low below $30 a barrel in January, the price of Brent has recovered by almost 50%, partly on hopes that big oil producers would be able to reach some form of deal to tackle global oversupply. The rebound had eased fears not just over the health of the resources sector but banks' exposure to energy-linked loans. Higher oil prices had also reduced concerns among investors about the fiscal positions of oil producing nations and that some may need to sell financial assets to raise cash. Consequently, the fallout from Doha has hit trader investor confidence - with energy sensitive assets in particular feeling the pain.
Among Asian bourses
Australia Market ends 0.4% down
Australian share market finished lower on first trading session of the week, with commodity-linked stocks being major losers on tracking pullback in crude oil prices after talks between major producers to freeze oil output collapsed over the weekend. At close of trade, the benchmark S&P/ASX 200 declined 20.40 points, or 0.4%, to 5137.10. The broader All Ordinaries lost 19.20 points, or 0.37%, to 5204.90. Falling stocks outnumbered advancing ones on the Australia Stock Exchange by 516 to 497 and 337 ended unchanged.
Shares of materials and resources declined, in the wake of further easing in the iron ore price and collapse of talk between oil producing countries to strike a deal to freeze production in an already oversupplied market. Among major miners, BHP Billiton dropped 3% to A$18.70 and Rio Tinto 1.6% to A$47.45. Among energy stocks, oil and gas explorer Woodside petroleum sank 1.4% to A$25.78, Origin Energy 5.8% to A$4.71, and Santos 7% to A$3.88.
Shares of banks and financials also closed lower, following warnings about risks in the local property market. On Friday, the RBA warned the apartment glut and the influx of Chinese capital into inner-city property markets was shifting the risks in the banking system. Westpac Bank declined 1.5% to A$30.44, National Australia Bank 0.8% to A$26.55, ANZ Bank 0.6% at A$23.70, and Commonwealth Bank 1.1% to A$74.18.
Nikkei tumbles on earthquake impact woes
The Japan share market ended steep lower, as investors sentiment soured on concerns over the economic impact of the powerful earthquakes that have rattled south-western Japan. All industry categories on the main section closed in negative territory, exception being construction issue, with notable decliners comprising insurance, marine transportation and financial stock-linked issues. The 225-issue Nikkei Stock Average plummeted 572.08 points, or 3.4%, to end the day at 16,275.95. The broader Topix index of all First Section issues on the Tokyo Stock Exchange plunged 41.25 points, or 3.03%, to close at 1,320.15.
Shares of export related companies tumbled on the back of increasingly firm yen against the U.S. dollar and concerns about the economic impact of the powerful earthquakes that have rattled southwestern Japan. Toyota Motor Corp. dropped 4.8% as a report said its operating profit may be reduced by about 30 billion yen for the quarter ending in June after the earthquakes disrupted parts supplies. Honda Motor Corp shed 2.9% after announcing its motorcycle plant in Kumamoto will also remain shut until Friday. Sony, which has kept its image sensor manufacturing facility offline, finished 6.8%. Kyushu Electric, which operates Japan's only two operating reactors, both on the island on which the quakes struck, dropped 8%, as the disaster aggravated safety concerns.
Shares of insurance players declined on concerns over spike in claim after Thursday's earthquake and strong aftershocks Saturday. Dai-Ichi Life Insurance Co. tumbled 5.6%, while Tokio Marine Holdings Inc. lost 5.9%.
Energy stocks drag China market lower
Mainland China stock market finished down, dragged lower by energy and property stocks after collapse of talks aimed at cutting global oil supply and concern the government will act to cool the property market. The benchmark Shanghai Composite Index declined 44.46 points, or 1.44%, to 3033.66. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, dropped 43.76 points, or 1.34%, to 3228.45.
Shares of blue-chip energy players declined, with China Petroleum & Chemical Corp. down 3% while Yanzhou Coal Mining Co. down 2%, as crude slumped the most in two months in New York after talks between major oil producers ended in Doha without any agreement on limiting output.
Chinese property developers stocks were also down, on concerns about tightening rules to cool the property market after the National Bureau of Statistics said on that new-home prices excluding affordable housing climbed in 62 cities, compared with 47 in February, among the 70 cities tracked by the government.
Hang Seng tumbles 3.2%
The Hong Kong stock market declined, with commodity-linked stocks leading retreat after talks between major producers to freeze oil output collapsed over the weekend. The benchmark index opened down 186 points at 21,129 after a deal to freeze oil output by oil-producing countries fell apart on Sunday in Doha, leading to the plunge of oil prices. It then saw its losses widen to more than 300 points, but recovered half of its losses on buying at late afternoon. The benchmark Hang Seng Index declined 154.97 points, or 3.19%, to 21161.50 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, erased 124.13 points, or 1.35%, to 9090.85 points. Turnover reduced to HK$55.5 billion from HK$59 billion on Friday.
Oil majors suffered after a failed agreement to freeze oil production in Doha's summit. Both CNOOC (00883) and PetroChina (00857) declined 2% to HK$9.57 and HK$5.23. Sinopec, another major oil and gas company, fell slipped 1% to HK$5.24.
HSBC (00005) fell 1% to HK$48.95 on news that the global bank's CEO Stuart Gulliver will step down in two years. Meanwhile, StanChart (02888) retreated after a 6-day winning streak on news that it has spoken to Paul Tucker, the former deputy governor of the Bank of England, about becoming its chairman. It dropped 1% to HK$56.05.
CKH Holdings (00001) fell 2% to HK$97.45 despite talks that the company has hired global law firm Linklaters to take on EU regarding its subsidiary UK Three's bid for O2.
Nifty gains for fifth day in a row
Telecom stocks and index heavyweights Infosys, HDFC and ITC led gains for the two key benchmark indices as the fourth quarter earnings season began on positive note. The barometer index, the S&P BSE Sensex, rose 189.61 points or 0.74% to settle at 25,816.36. The Nifty rose 64.25 points or 0.82% to settle at 7,914.70. Shares of index heavyweight and IT major Infosys surged after the company forecast strong revenue growth for the year ending 31 March 2017 (FY 2017) at the time of announcement of its Q4 March 2016 results.
Telecom stocks gained after the finance ministry on 14 April 2016 clarified that no service tax is payable by telecom service providers (TSP) for spectrum assigned/auctioned to them before 1 April 2016. IT stocks moved higher after Infosys issued strong revenue growth guidance for the year ending 31 March 2017 (FY 2017). Pharma major Lupin edged higher after the company announced that its US subsidiary, Lupin Pharmaceuticals Inc. has launched its Fyavolv tablets in the United States. Mahindra & Mahindra (M&M) edged higher in volatile trade after a top official of the company said that the company is working on a range of gasoline engine options.
Stocks of oil exploration and production (E&P) firms edged lower as crude oil prices dropped. Stocks of public sector oil marketing companies (PSU OMCs) edged higher on decline in crude oil prices. National Aluminium Company jumped 9.71% in a single trading session after the company announced that a meeting of its board of directors would be held on 22 April 2016 to consider the proposal for buyback of equity shares of the company.
Indian index heavyweight and cigarette maker ITC rose after the company on Friday, 15 April 2016, announced that consequent upon a High Court order passed in favour of the company, the company will soon resume manufacture of cigarettes in its factories. State Bank of India (SBI) edged lower after the bank's Chairman Arundhati Bhattacharya was quoted as saying that the Reserve Bank of India (RBI) has directed the bank to provide for losses on food grain-related loans issued to the Punjab state government.
Elsewhere in the Asia Pacific region: New Zealand's NZX50 was up 0.1% to 6851.20. South Korea's KOSPI index sank 0.3% to 2009.10.Taiwan's Taiex index slid 0.4% to 8666.01. Malaysia's KLCI dropped 0.6% to 1717.68. Indonesia's Jakarta Composite index added 0.9% to 4865.53. Singapore's Straits Times index shed 0.2% to 2917.75.
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