Libya unrest keeps Asian shares on edge
By KELVIN CHAN
The Associated Press
Thursday, February 24, 2011; 2:06 AM
HONG KONG — Asian shares were mostly lower Thursday as surging oil prices, violence in Libya and a weak finish on Wall Street kept markets on edge.
Oil prices rose above $99 a barrel as chaos in Libya disrupted crude supplies from the OPEC nation, and traders worried instability could spread to oil-rich countries in the Middle East.
A sustained jump in the oil price would knock consumer spending and undermine economic recovery in the U.S. and Europe.
In currencies, the dollar was lower against the yen and higher against the euro.
“The recent Middle East unrest is bothering everyone,” said Jackson Wong, vice president at Tanrich Securities in Hong Kong. “It’s not a very good day, and the market is still trending down because of high oil prices, high commodity prices because of the Middle East unrest,” he said. That will “translate into obstacles for the U.S. and European recovery.”
Japan’s Nikkei 225 stock average lost 1.1 percent to 10,452.71. A strong yen pressured exporters, whose repatriated profits from abroad decline in value as the yen appreciates. Honda Motor Co. fell 1.4 percent, Sony Corp. dropped 1.5 percent and Hitachi Ltd. was 1 off 1.5 percent.
Australia’s S&P/ASX 200 shed 0.8 percent to 4,809.30 and South Korea’s Kospi fell 0.6 percent to 1,949.88. Benchmarks in Singapore, New Zealand and India also declined.
Meanwhile, other markets eked out modest gains. Hong Kong’s Hang Seng index rose 0.1 percent to 22,920.43 and the Shanghai Composite index added 0.6 percent to 2,879.64. Benchmarks in Thailand and Taiwan also rose.
In New York on Wednesday, stocks fell for a second straight day after clashes in Libya sent oil prices to two-year highs and technology giant Hewlett-Packard said its revenue growth was slowing.
Libya is the world’s 15th largest exporter of crude, accounting for 2 percent of global daily output. Traders are worried the revolt could threaten Libya’s oil production and spread to other countries in the region such as oil powerhouse Saudi Arabia.
Many Asian airlines extended losses on the sharp rise in oil prices, while energy companies benefited.
Japan’s biggest energy explorer, Inpex Corp., was up 1.8 percent, and CNOOC Ltd. climbed 1.3 percent in Hong Kong.
China Southern Airlines Co., traded in Hong Kong, nosedived 2.5 percent. Qantas Airways Ltd. dropped 3.3 percent and Thai Airways International slid 4 percent.
The Dow Jones industrial average lost 107.01 points, or 0.9 percent, to 12,105.78. The broader S&P 500 fell 8.04, or 0.6 percent, to 1,307.40. The Nasdaq composite fell 33.43, or 1.2 percent, to 2,722.99.
In currencies, the dollar fell to 82.10 yen from 82.53 yen late Wednesday. The euro dropped to $1.3740 from $1.3744.
Benchmark crude for March delivery was up $1.05 at $99.15 a barrel in electronic trading on the New York Mercantile Exchange. The contract, which has soared 18 percent since last week, jumped $2.68 to settle at $98.10 on Wednesday.