TOKYO, June 14 2019 : Asian stocks held their ground today after Wall Street gained on a surge in oil prices as attacks on tankers in the Gulf of Oman stoked U.S.-Iran tensions and raised concerns over supply flows through one of the world’s main sea lanes.
MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed.
Australian stocks edged up 0.05 per cent while Japan’s Nikkei dipped 0.1 per cent.
U.S. stocks rose yesterday after two days of declines, with energy shares rebounding on the back of crude oil’s surge.
Wall Street shares have had a strong run in June on hopes the Federal Reserve will ease monetary policy soon to counter a slowing global economy due to the escalating trade war with China. The S&P 500 index is up about five per cent so far for the month.
But equity market gains were limited ahead of the Fed’s June 18-19 meeting, which will give investors an opportunity to see if the Fed’s monetary policy stance is in sync with market expectations for a near-term rate cut.
“A wait-and-see mood is likely to begin prevailing in the markets ahead of the FOMC.”
In commodities, Brent crude futures slipped 0.29 per cent to $61.13 per barrel after rallying 2.3 per cent the previous day.
Brent surged yesterday after two oil tankers were attacked in the Gulf of Oman, one Norwegian-owned and the other Japanese-owned.
The United States has blamed Iran for the assaults. But U.S. and European security officials as well as regional analysts left open the possibility that Iranian proxies, or someone else entirely, might have been responsible.
U.S. crude slipped 0.86 per cent to $51.83 per barrel after rising more than two per cent yesterday.
The euro was steady at $1.1281 while the greenback dipped 0.1 per cent to 108.295 yen.
The Australian dollar was a touch lower at $0.6914, still shaky after the previous day’s losses. The Aussie had slipped to a two-week trough of $0.6901 on Thursday after soft domestic labour data added to expectations of a rate cut by the Reserve Bank of Australia. – Reuters