TOKYO (Reuters) - Asian stocks sagged on Tuesday, weighed by a sharp decline in crude oil prices as Libyan ports reopened, while the dollar steadied ahead of Federal Reserve Chairman Jerome Powell’s first congressional testimony.
Overnight on Wall Street, the Dow edged up 0.2 percent but the S&P 500 lost 0.1 percent as energy shares were hit by the drop in oil that offset a jump in financials. [.N]
MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.5 pct lower following two sessions of gains.
Chinese shares extended losses after dropping the previous day on soft economic data. The Shanghai Composite Index fell 0.7 percent and Hong Kong’s Hang Seng dropped 0.9 percent.
Australian stocks fell 0.4 percent and South Korea’s KOSPI lost 0.2 percent. Japan’s Nikkei bucked the trend and rose 0.5 percent.
“Crude has been rising steadily so some kind of adjustment was due. From this context the impact on the broader economy, inflation and therefore the stock markets should be limited,” said Soichiro Monji, senior economist at Daiwa SB Investments in Tokyo.
Crude prices slumped more than 4 percent on Monday, with Brent futures reaching a three-month low of $71.52 a barrel, as Libyan ports reopened and traders eyed potential supply increases by Russia and other producers. [O/R]
Concerns over China’s second-quarter economic growth also weighed on oil prices. The country’s economy expanded at a slower pace as Beijing’s efforts to contain debt hurt activity, while June factory output growth weakened to a two-year low.
But Brent has gained about 7.5 percent in 2018, during which it poked above $80.00 a barrel in May to a
