Asian stocks slip as oil woes sap sentiment, euro stands tall

15 Nov, 2017 8:56 am

TOKYO (Reuters) – Asian stocks slipped on Wednesday after weaker crude oil prices took a toll on Wall Street, while the euro kept big gains after enjoying a boost from robust German economic growth.

MSCI’s broadest index of Asia-Pacific shares outside Japan  was down 0.16 percent.

Australian stocks dropped 0.48 percent and South Korea’s KOSPI shed 0.5 percent. Japan’s Nikkei  lost 0.8 percent.

“The decline by US equities led by energy shares is having a knock-on effect, dampening sentiment in sectors related to energy and industry,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.

“Broadly speaking equities had enjoyed an almost uninterrupted run for the past few months, so we are seeing a bit of a correction finally emerging.”

All three major US stock indexes dipped on Tuesday as an extended drop in crude oil prices hit energy shares and as General Electric  plunged for a second straight day.

The euro stood little changed at $1.1793 after rising 1.1 percent overnight to a 2-1/2-week high of $1.1805 as data showed Germany’s economy shifted into a higher gear in the third quarter.

Germany’s seasonally adjusted gross domestic product (GDP) rose by 0.8 percent on the quarter, compared with a Reuters poll forecast of 0.6 percent.

Pressured by the euro’s surge, the dollar index against a basket of six major currencies lost about 0.7 percent overnight before bouncing back modestly to 93.881.DXY.

The greenback was steady at 113.420 yen after pulling back from a high of 113.910 the previous day.

The immediate focus for the dollar, and a potential catalyst, was data on US consumer prices due later in the global day.

In commodities, crude oil prices stretched losses, weighed by forecasts for rising US crude output and a gloomier outlook for global demand growth in a report from the International Energy Agency (IEA).

US crude futures CLc1 were down 1.15 percent at $55.06 per barrel and on track for their fourth day of losses.

With oil prices having slid steadily from 28-month highs scaled last week, commodity currencies came under pressure.

The Australian dollar traded at $0.7630 and within reach of a four-month low of $0.7609 plumbed on Tuesday.

The Canadian dollar stood at C$1.2739  per dollar after weakening to a one-week low of C$1.2773 overnight.

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