Rising oil price still a worry for Asian markets

Asian markets followed Wall Street’s negative lead over the weekend and were trading lower today.

In Japan, the Nikkei 225 fell sharply and was down almost 2 per cent with all sectors trading weaker. Rising oil price and the unrest in Libya are dampening investors’ sentiment in Asia. It’s pretty bearish out there at the moment.

Sumitomo Chemical Co was down 4.3% and Japan Tobacco Inc was down 3.5%. However, Oki Electric Industry Co, a Japanese maker of electronics headed for its third loss in five years, surged the most in almost a year after saying about 6% of its workforce will take early retirement. The Tokyo based company gained 12.3% climbing as high as 15%.

In Hong Kong, the Hang Seng was down around 0.15 per cent. Cathay Pacific Airways, Hong Kong’s number one airline retreated 3.2% on higher oil prices. CNOOC, China’s biggest offshore oil producer increased 1.7%.

In Australia, the ASX 200 lost 66 points on the back of weakness across all sectors. We (the local market) followed the negative lead from the US on the weekend. We saw whatever (market) gains and strength last week dissipated over the weekend. And there’s no way we could avoid today’s falls given the uncertainty in global markets.

It looks like the Libyan situation is getting worse and starting to affect global stockmarkets. The rising oil price is just one indication of the worsening situation in Libya, and if it is not resolved soon, we may see more anxiety among investors.

We saw across the board falls, but the defensive sectors are leading the fall. Some oil and gas stocks are trading fine – only slightly lower compared to other sectors.