ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintSite TitleTitle ChevronIcon Twitter
Nikkei Markets

Asian stocks skid amid crude oil rout, virus fears

Oil-related shares lead losses after Brent futures plunge

HONG KONG (Nikkei Markets) -- Asian stocks outside of Japan slumped Monday, as a rout in crude oil prices worsened risk sentiment that was already under pressure from the coronavirus outbreak.

The Nikkei Asia300 index tumbled 5% to 1,227.55.

Global oil prices plunged after Saudi Arabia announced plans to ramp up crude production and slash prices following a breakdown of a supply cut agreement between the Organization of Petroleum Exporting Countries and Russia. Saudi Arabia reportedly plans to boost its crude output above 10 million barrels per day in April. Brent crude futures were trading more than 20% lower at $35.94 a barrel after prices fell 9.4% on Friday. Futures had fallen to as low as $31.02 a barrel earlier.

CNOOC and PetroChina fell 17.2% and 9.6%, respectively, in Hong Kong, while Sapura Energy sank 34.4% in Kuala Lumpur. PTT Exploration and Production plunged nearly 30% in Bangkok. In Mumbai, Oil and Natural Gas Corp. lost 16.3%, while Reliance Industries shed 12.4%.

"We would eventually expect to see a bottoming-out in stocks before the commodity itself," James Trafford, an analyst and portfolio manager at Fidelity International, wrote in a note. "But that bottoming will require some stabilization in the coronavirus data points, or signs of a policy rapprochement among oil producers. In the meantime, investors should brace for volatility."

The Japanese yen surged 2.7% against the dollar as risk-averse investors bought into the safe-haven asset.

Meanwhile, fears over the economic impact of the widespread coronavirus lingered. Total cases of the infection surpassed 109,000 on Sunday, and fatalities topped 3,100.

Among heavyweights, Tencent Holdings dropped 4.7% in Hong Kong, while pan-Asia insurer AIA Group declined 6.1%. Samsung Electronics lost 4.1% in Seoul.

Electric vehicle and battery maker BYD fell 8.4% in Hong Kong after saying that its February sales plunged nearly 80% from a year earlier amid the impact on demand from the coronavirus.

In Taipei, Innolux and Asustek Computer fell 4.2% and 1.2%, respectively, after each reported declines in February sales. Compal Electronics slipped 0.8% following a 27.3% tumble in last month's sales.

Singapore's three largest lenders declined, with DBS Group Holdings slipping 8%, United Overseas Bank shedding 7.3%, and Oversea-Chinese Banking Corp. losing 6.8%.

"The collapse in oil prices should have a limited negative first-order effect on the loan quality of Singapore's three largest banks," Eugene Tarzimanov, vice president and senior credit officer at Moody's Investors Service, wrote in a note. "But if low oil prices persist over a prolonged period, the banks will post higher non-performing loans because of second-order effects, such as a further economic slowdown in Singapore and lower corporate earnings, on top of disruptions already caused by the coronavirus."

--Suzannah Benjamin

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends July 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media