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Financial Markets 04/29 06:31
HONG KONG (AP) -- Stocks mostly advanced in Asia on Wednesday despite losses
on Wall Street, while oil prices gained on uncertainties over when the war in
Iran will end and after the United Arab Emirates said it would leave OPEC in a
blow to the powerful oil cartel.
U.S. futures edged higher.
Markets in Japan were closed for a holiday.
Elsewhere in Asia, South Korea's Kospi rose 0.8% to 6,690.90 and the Hang
Seng in Hong Kong gained 1.5% to 26,050.90. The Shanghai Composite index traded
0.7% higher at 4,107.51.
Australia's S&P/ASX 200 slipped 0.3%, to 8,687.00.
Taiwan's Taiex lost 0.6%, and India's Sensex gained 1.4%.
The price of a barrel of Brent crude oil to be delivered in June rose 1.1%
to $112.47 early Wednesday. Brent to be delivered in July was also up 1.1% to
$105.50. Brent oil was around $70 per barrel before the war began in late
February.
Benchmark U.S. crude gained 1% to $100.94 a barrel.
The UAE's departure from OPEC, due to happen on Friday, has been closely
watched by oil markets. OPEC accounts for roughly 40% of global oil output, and
the UAE is one of OPEC's largest oil producers. It has pushed back against OPEC
production quotas in recent years, wanting to sell more oil to the rest of the
world.
"The UAE's exit will increase (oil) output," ING Bank strategists Warren
Patterson and Ewa Manthey wrote in a research note on Wednesday. "The UAE has
been increasingly frustrated over recent years by its output being constrained
by OPEC production quotas, which have kept it well below its potential."
"However, before this can be tapped, there must be a resolution in the
Persian Gulf that allows for uninhibited energy flows through the Strait of
Hormuz once again," they added.
As U.S.-Iran negotiations for a permanent end to the Iran war stalled and
the Strait of Hormuz, where roughly one fifth of the world's oil passed through
before the war, was still largely closed, short term impacts on oil prices will
still depend mainly on prospects for reopening the waterway, analysts said.
The UAE was the third largest oil producer within OPEC before the Iran war.
ING said its departure "will reduce OPEC's effectiveness in managing and
influencing the global oil market through supply measures."
Investors are also awaiting more updates on U.S.-Iran peace talks, although
limited progress has been made. Iran has offered to reopen the Strait of Hormuz
if the United States lifts its blockade on its ports. So far, the U.S. appears
to be ruling out a deal that excludes the Islamic Republic's nuclear program.
The Federal Reserve is expected to announce a decision on interest rates
later Wednesday.
On Tuesday, Wall Street retreated from its recent record highs. The
benchmark S&P 500 fell 0.5% from its latest all-time high to 7,138.80. The Dow
Jones Industrial Average edged down 0.1% to 49,141.93, and the technology-heavy
Nasdaq composite dropped 0.9% to 24,663.80.
Artificial intelligence -related stocks led the losses. Chip company
Broadcom lost 4.4%, Nvidia fell 1.6% and Micron Technology lost 3.9%. Alphabet,
Amazon, Microsoft and Meta Platforms are reporting quarterly results on
Wednesday.
In other dealings early Wednesday the U.S. dollar rose to 159.68 Japanese
yen from 159.62 yen. The euro was trading at $1.1707, down from $1.1712.
The yield on the U.S. 10-year Treasury was up slightly to 4.36%.
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AP Business Writer Stan Choe contributed to this report.
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