Asia stocks fall as rally fizzles out

20 February 2016 12:00 am - 0     - {{hitsCtrl.values.hits}}

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Investors are concerned at the downside of earnings, especially for exporters, which may weigh down the markets

The rally in Asia stocks fizzled out yesterday, as a renewed weakening in the price of oil dampened sentiment and safe haven assets such as the yen received a boost.
US crude fell below $31 a barrel as traders digested news that American stockpiles rose to their highest in more than eight decades, reigniting concerns about demand and broader worries about the global economy.


While turbulence in Asian markets has abated this week with losses earlier in the year being partially won back, investors remain on alert over the global glut in crude and China’s economic outlook.
Since the start of the year, tumbling oil prices, concern about the slowdown in Asia’s largest economy and a sell-off in bank stocks sent some global stocks into a bear market.
Markets had received welcome support earlier in the week when oil prices jumped Wednesday following a pact between top two producers Russia and Saudi Arabia to pursue a coordinated strategy to limit output.


“Sentiment on the oil market has been a key macro driver for stock-market sentiment recently,” Ric Spooner, Sydney-based chief market analyst at CMC Markets, told Bloomberg News.
“Concerns about the potential for credit-market problems in the event of a lower-for-longer oil scenario are near the top of a fairly long list 
of macro factors worrying investors at the moment.”
West Texas Intermediate slipped 0.8 percent Friday after rising in the past two days. Brent also fell 0.8 percent.
“Inventories continue to build,” Michael McCarthy, a chief strategist at CMC Markets in Sydney, said by phone, according to Bloomberg. “Not only is there downside risks to prices but there is also obvious limits to any upside potential.”

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