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Nikkei Markets

Asian stocks fall as crude oil jumps on report US to withdraw Iran oil import waivers

Equities in India, Indonesia pace losses

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan fell Monday after crude oil prices jumped on a report the U.S. will end waivers for importing oil from Iran soured appetite for regional assets.

The Nikkei Asia300 Index of companies outside Japan declined 0.5% to close at 1,366.83.

Stocks in India and Indonesia paced losses in Asian equities as oil prices surged following the report by The Washington Post that the U.S. is set to announce that it will end waivers granted for importing oil from Iran. According to the report, U.S. Secretary of State Mike Pompeo is expected to announce that temporary waivers previously granted will no longer be applicable starting May 2.

Back in November, the U.S. had allowed a 180-day waiver to eight countries after it reimposed sanctions on Iran so as to ensure there were no significant disruptions in the global oil market. If the U.S. withdraws that temporary exemption from next month, major Asian economies of China, India, Japan and South Korea will have to look for alternative sources to meet their import requirements.

"With Asia's significant economies all heavy oil importers, this may cause some adverse reactions across the region," said Jeffrey Halley, a senior market analyst at OANDA.

On Monday, India's benchmark equity index, the BSE Sensex, fell 1.3%, and the nation's currency tumbled as much as 0.7% in intraday trade. The Jakarta Stock Exchange Composite Index dropped 1.4%.

India imports more than three-fourths of its oil requirements and Indonesia has turned a net oil importer in the last one-and-a-half decade.

Indian Oil paced losses in fuel retailers on the A300 index, tumbling 4.1%. Thailand's energy-explorer PTT Exploration and Production rose 1.9%, and Singaporean rig builder Keppel advanced 2.4%. On Late Thursday, Keppel had reported a 40% decline in first-quarter net profit.

Most Asian financial markets were closed on Friday.

Reliance Industries, hovering near record highs, dropped 2.8%. The Indian conglomerate on Thursday reported a better-than-expected 9.8% increase in March quarter net profit amid surging revenue from its wireless and retail ventures, which offset weak margins at the core energy and gas business.

DiGi.Com declined 2.6% after the Malaysian telecom operator reported a 12% decline in first-quarter net profit amid declining prepaid revenues.

Krung Thai Bank advanced 1% after the Thai lender reported an 18% increase in March quarter net profit.

--Nimesh Vora

 

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