Asia Energy Stocks Fall as Oil Drops; Investors Review Outlook
(Bloomberg) -- Asian energy stocks fell as crude oil extended declines below $50 a barrel. The region's equity benchmark was little changed as investors assessed whether the global economic outlook justified this year's advance.
Idemitsu Kosan Co. dropped 3.6 percent in Tokyo, while Origin Energy Ltd. slid 2.9 percent and China Oilfield Services Ltd. slid 3 percent. South Korea's Kospi rose for the first time in three days and Hong Kong-listed mainland shares gained after Chinese manufacturing data exceeded estimates.
“Energy companies could be a prime target for correction, considering the oil market recently has been driven by the supply situation rather than the fundamentals of oil demand,” said Jeffrosenberg Tan, head of strategy at PT Sinarmas Sekuritas in Jakarta. “I think many investors are taking a step back to review their initial expectation on the global economy considering the market has gained substantially this year.”
Federal Reserve Governor Lael Brainard said Tuesday continued soft inflation would be “concerning” and may prompt her to review the U.S. monetary policy trajectory, even as the global economic outlook brightens and world's largest economy looks poised for a rebound. The MSCI Asia Pacific Index has risen 13 percent this year, driven by prospects for economic growth.
China's official factory gauge held up in May, adding to signs the world's second-largest economy has maintained some of its first-quarter momentum. The manufacturing purchasing managers index remained at 51.2 for a second straight month, compared with a median estimate of 51 in a Bloomberg survey of economists.
Summary
- MXAP -0.1% to 152.63 as of 3:43 p.m. in Hong Kong
- About 5 stocks decline for every 4 gaining
- Japan's Topix -0.3%
- SHCOMP climbs 0.2%
- HSCEI little changed, Hang Seng Index -0.1%, reopening after holiday Tuesday
- South Korea's Kospi +0.2%
- Australia's S&P/ASX +0.1%, New Zealand NZX +0.1%
- Straits Times Index little changed, Jakarta Composite Index +0.3%, Vietnam's VN Index +0.2%
- Philippine Stock Exchange Index -0.4%, FTSE Bursa Malaysia KLCI Index -0.1%
- India's Sensex Index +0.1%
To contact the reporter on this story: Harry Suhartono in Jakarta at hsuhartono@bloomberg.net.
To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Jonathan Annells, Todd White
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