While Wall Street witnessed its biggest decline since last August yesterday, markets in Asia recorded a marginal recovery in early trade today. Meanwhile, the International Energy Agency is expected to meet this week to discuss the need to tap strategic crude stockpiles in the wake of continued turmoil in the Middle East.
The local market is likely to see a soft-to-flat opening, tracking unsupportive global cues. Wall Street, which opened after an extended weekend yesterday, ended with a deep cut on continued violence in Libya. However, the Asian pack that saw a huge decline on Tuesday was trading marginally lower with two key indices in the green in early trade today. Meanwhile, the International Energy Agency is expected to meet this week to discuss the need to tap strategic crude stockpiles in the wake of continued turmoil in the Middle East. The SGX Nifty was down 26 points at 5,449 against its previous close of 5,476.
Yesterday, the Sensex and the Nifty both opened with a negative gap at 18,391 and 5,504. Both the key indices were able to restrain themselves from falling below yesterday's lows, despite massive sell-offs in Asia and a sudden sharp jump in crude oil prices. The Sensex hit an intra-day low of 18,187, while the Nifty's low was 5,437. The Sensex ended 142 points down at 18,296 and the Nifty settled 49 points lower at 5,469.
The market remains in a trading zone. The silver lining is that it refuses to go down much in the face of bad news.
The US markets, which opened after an extended weekend, witnessed their biggest loss since August on continued violence in Libya. Wal-Mart tumbled 3.1% as the world’s biggest retailer posted a seventh straight quarterly sales drop at its US stores, falling short of its own projections for the holiday period. Bank of America fell 3.9% after announcing that its credit-card subsidiary was restating eight quarters of reports to regulators because it took a $20.3 billion write-down because of deteriorating credit and new regulations over the past two years. On the other hand, energy components were among the few stocks to gain Tuesday, as oil prices surged. In economic data, US consumer confidence rose in February to a three-year high on improved optimism about the economy and income prospects, according to the Conference Board, a private group.
The Dow declined 178.46 points (1.44%) to close at 12,212.79. The S&P 500 lost 27.57 points (2.05%) to 1,315.44 and the Nasdaq fell 77.53 points (2.74%) to 2,756.42.
Markets in Asia, which settled with huge cuts yesterday, witnessed a marginal recovery this morning with two key indices in the green. Crude oil for March delivery gained 8.6% to $93.57 a barrel in New York on Tuesday, the highest settlement since 3 October 2008, on concern that supplies from Libya, holder of Africa’s largest crude reserves, may be disrupted. Brent crude for April delivery on the ICE futures exchange rose four cents to settle at $105.78 a barrel, its highest settlement since 22 September 2008.
The Shanghai Composite was down 0.08%, the Hang Seng fell 0.45%, the KLSE Composite declined 0.49%, the Nikkei 225 lost 0.20%, the Straits Times declined 0.82% and the Taiwan Weighted was 0.53%. On the other hand, the Jakarta Composite gained 0.39% and the Seoul Composite was up 0.08%.Meanwhile, the International Energy Agency (IEA) said its governing board will hold a meeting to discuss whether to tap strategic stockpiles of crude oil on the back of the political turmoil across the Middle East.
On Tuesday Libya shut all of its ports, including those used to export oil, as tensions in the country continue. Libya’s estimated 44.3 billion barrels of oil reserves are the largest in Africa.
The IEA, which represents the governments of developed economies, the Organization of Petroleum Exporting Countries and top oil exporter Saudi Arabia had reached agreement prior to Tuesday’s gathering that producers should tap surplus production capacity in case oil supply from Libya was disrupted.