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A rally in oil prices that erased losses in the previous session failed to bolster energy equities in Asia as bonds and currencies held off on major moves ahead of the US Federal Reserve’s interest rates decision on Wednesday.

Crude was rallying in Asia trade after a precipitous drop on Tuesday. Brent crude, the international benchmark, was up 1.3 per cent at $51.58 a barrel, putting it back above its opening level for the week and more than compensating for a 0.8 per cent drop the day prior. West Texas Intermediate, the US marker, was up 1.5 per cent at $48.45, having closed lower by as much on Tuesday.

The boost for oil prices followed a rare statement from Saudi Arabia’s energy ministry on Tuesday asserting the country’s commitment to “stabilising the global oil market”. The statement was rushed out after 8pm in Riyadh after Opec’s monthly report showed Saudi production had increased in February, adding to existing concerns over a rebound in US shale oil output.

Stock markets’ response to the climb in crude prices was muddled, with energy stocks largely following on from a drop of 0.9 per cent by the S&P 500 energy sector on Wall Street.

In Australia the energy segment of the S&P/ASX 200 index was down 0.4 per cent, pulled lower by a 0.7 per cent decline from shares in Woodside Petroleum. However, miner BHP Billiton was up 0.6 per cent, and rival Rio Tinto had climbed 1.5 per cent. The broader benchmark index was down 0.4 per cent.

In Tokyo shares in Inpex Corp were down 1.7 per cent while Japan Petroleum Exploration Corp had dropped 2.2 per cent. That helped bring the energy segment of the Topix index down 1.5 per cent, with the broader index off 0.4 per cent.

Hong Kong’s Hang Seng index fell 0.4 per cent, with energy stocks dropping 0.8 per cent. Among the hardest hit were shares in state-owned Chinese petroleum companies, with CNOOC down 1.2 per cent and PetroChina off 0.9 per cent.

The US dollar index tracking the greenback against a basket of peers was flat at 101.66, with currencies largely stable in the lead up to Wednesday’s Fed decision despite oil price volatility.

The only marked gains on the dollar came from the Taiwanese dollar, up 0.3 per cent on its American counterpart at TW$30.891, and the New Zealand dollar, which firmed 0.2 per cent to NZ$0.6935.

Sovereign bond markets were in wait-and-see mode ahead of Wednesday’s Fed meeting, at which it is widely expected to raise rates. The yield, which moves opposite to price, on 10-year US treasuries was flat at 2.597 per cent.

Government bonds were likewise little moved in the Asia Pacific region, with the exception of 10-year Japanese government bonds, which saw yield down 1bp at 0.082 per cent.

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