Wednesday outlook: Asian shares drop, oil prices rise

Middle East markets rose on Tuesday, tracking a rally in global markets. Oil prices added gains in early trading on Wednesday

  
Image used for illustrative purpose. Chinese labourers work at the Lunnan oilfield on October 11, 2006 in Lunnan county, Xinjiang Uygur Autonomous Region, China.

Image used for illustrative purpose. Chinese labourers work at the Lunnan oilfield on October 11, 2006 in Lunnan county, Xinjiang Uygur Autonomous Region, China.

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  • Asian shares retreat following previous drops
  • Stock markets in the Middle East mostly edge higher
  • Oil prices add gains on lower supply
  • Dollar drops, gold rises

Global markets

Asian shares retreat following a rebound in the previous session.

MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.4 percent.

Japan’s Nikkei led the way with a fall of 1.3 percent as data showed machinery orders fell in January at the fastest pace in four months.

Shanghai blue chips slipped 0.4 percent following two days of gains. E-Mini futures for the S&P 500 were off 0.25 percent.

Overnight on Wall Street, the Dow dropped 0.38 percent, the S&P 500 gained 0.30 percent and the Nasdaq added 0.44 percent.

Middle East markets

Stock markets in the Middle East mostly rose on Tuesday, tracking a rally in global markets.

The Dubai index rose 0.3 percent, with Dubai Investments gaining 2.3 percent and builder Damac Properties adding 2.2 percent.

Abu Dhabi's index edged down 0.2 percent, with Emirates Telecommunications Group slipping 0.5 percent.

The Qatari index was up 0.2 percent as Qatar Fuel advanced 1.6 percent and blue-chip petrochemical maker Industries Qatar increased 0.6 percent.

Egypt’s blue-chip index EGX30 rose 0.3 percent with developer Sixth of October Development and Investment (SODIC) jumping 7.4 percent.

Kuwait’s premier market index added 0.3 percent, Bahrain’s index edged 0.1 percent lower and Oman’s index dropped 0.1 percent.

Oil prices

Oil prices added gains on Wednesday, supported by tightening supplies.

OPEC issued a list of oil production cuts by its members and other major producers for six months starting January 1, to boost confidence in its oil supply reduction pact.

Oil prices have also been boosted by lower supply from Venezuela, as the U.S. introduced petroleum export sanctions against state-owned Venezuelan energy firm PDVSA.

International Brent crude oil futures were at $66.85 a barrel at 0341 GMT, up 18 cents, or 0.3 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $57.12 per barrel, up 25 cents, or 0.5 percent, from their last settlement.

According to a Reuters report, National Australia Bank (NAB) said the oil market outlook was mixed, with downside price risk coming from economic growth concerns and strong oil supply growth from the United States, with OPEC’s supply cuts and U.S. sanctions against Iran and Venezuela acting as price drivers.

“On balance, we see a very gradual uptrend for oil this year, with Brent forecast to reach $70 per barrel by the end of the year,” NAB said.

Currencies

The dollar dropped early on Wednesday.

The dollar index, which measures the greenback against a basket of six major currencies, was little changed at 96.992 after losing 0.3 percent overnight.

Precious metals

Gold prices rose on a weaker dollar.

As of 0130 GMT, spot gold was up 0.2 percent at $1,303.74 per ounce, after touching its highest since March 1 earlier in the session at $1,304.63.

U.S. gold futures were up 0.4 percent at $1,303.80 an ounce.

(Reporting by Gerard Aoun; Editing by Mily Chakrabarty)

(gerard.aoun@refinitiv.com)


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