Stocks in Asia saw steep declines on Monday as oil prices plunged amid fears of a price war after the Organization of the Petroleum Exporting Countries (OPEC) failed to strike a deal with its allies on production cuts, adding to volatility already brought about by fears surrounding the coronavirus spread.
The Nikkei 225 tumbled 1,050.99 points, or 5.1%, to 19,698.76,
The Japanese yen, often seen as a safe-haven currency, traded at 102.37 per U.S. dollar after seeing levels above 108 last week. Gold prices rose in the afternoon of Asian trading hours.
In economic news, Japan’s economy shrank an annualized 7.1% in October-December, according to data from Japan’s Cabinet Office released Monday. That was a larger decline than the first preliminary estimate of a 6.3% annualized shrinkage. It was also worse than economists’ median forecast of a 6.6% contraction and the biggest fall since April-June 2014.
In Hong Kong, the Hang Seng Index dropped 1,106.21 points, or 4.2%, to 25,040.46.
Shares of oil companies also saw sharp losses. Australia’s Santos plunged 27% while Beach Energy dropped 19.4%. In Japan, Japan Petroleum Exploration fell 12.7%. Hong Kong-listed stocks of PetroChina plummeted 9.6% and CNOOC lost 17.2%.
The moves came after Saudi Arabia announced massive discounts on Saturday to its official selling prices for April, with the kingdom reportedly preparing to increase its production above the 10-million-barrel-per-day mark.
Saudi Arabia’s price cut followed a breakdown of talks in Vienna last week between OPEC and its allies, known as OPEC+, during a Friday meeting. The cartel had recommended additional production cuts on Thursday, but that was rejected by OPEC ally Russia on Friday.
CHINA
The CSI 300 slumped 141.38 points, or 3.4%, to 3,997.13
Chinese trade data released over the weekend showed the country’s January-February overseas shipments contracting 17.2% from the same period a year before, marking the steepest fall since February 2019.
Analysts had projected a 14% drop as the coronavirus outbreak disrupted supply chains and dampened demand.
Media also reported that China reported a trade deficit of $7.09 billion for the period, versus an expected surplus of $24.6 billion.
The Australian dollar changed hands at $0.6547 after an earlier low of $0.6318.
In other markets
In Korea, the Kospi index dumped 85.45 points, or4.2%, to 1,954.77
In Taiwan, the Taiex jettisoned 344.17 points, or 3%, to 10,977.64
In Singapore, the Straits Times Index docked 178.61points, or 6%, to 2,782.37
In New Zealand, the NZX 50 floundered 344.09 points, or 2.9%, to 11,091.81
In Australia, the ASX 200 lost 455.65 points, or 7.3%, to 5,760.56
