Asia shares fall on oil, copper
January 14, 2015
Unease over the global economy and plunging oil prices sent Asian investors to safer assets on Wednesday, denting Japanese and Asia-Pacific equities, while the euro slipped to its lowest level against the yen in three months after European Central Bank officials seemed to suggest more stimulus action was on the way.
The price for a barrel of Brent crude oil dropped another 40 cents on Wednesday to $46.19 (39.13 euros), while US crude fell 46 cents to $45.43. As if to add insult to injury, copper futures also tumbled 6.2 percent - a worrying development for investors because the metal is considered a barometer of industrial demand.
Unease over the drop in fuel and metal prices was compounded by a World Bank report issued yesterday, in which the organization slashed its global growth forecasts for 2015, citing weakness in the eurozone and Japanese economies.
Nervous investors flocked to the yen, considered a safe-haven currency in times of distress. The dollar slipped to 117.50 yen in Tokyo, from 117.90 in New York a day earlier. The euro also weaked to 138.31 yen and $1.1770 from 138.84 yen and $1.1777 in US trade.
"It's easy for the yen to strengthen amid a flight to quality," said Masato Yanagiya, the head of foreign exchange and money trading at Sumitomo Mitsui Banking Corp. "If stocks continue to slump on the idea that low oil prices will become a risk to the US or the global economy, the dollar-yen will continue to fall."
Japan's Nikkei index fell 291.75 points, or 1.71 percent, to close at 16,795.96 points. The Topix index shed 16.71 points, a 1.22 percent slide, to 1,357.98 points.
Australia's main index was down 0.9 percent, as mining shares were hit by falling copper prices.
Shares in Hong Kong fell after the benchmark index rose 0.23 percent in the morning session. The Hang Seng dipped 0.4 percent to 24,112.60 points, while the China Enterprises Index lost 0.5 percent to 12,008.37 points.
cjc/sgb (Reuters, AFP, dpa)