Oil price recovers ahead of Opec meeting

Wednesday 06:00 GMT

Overview

Markets across Asia were treading cautiously on Wednesday, following mild overnight gains for Wall Street, a weakening of the US dollar and as investors turned their attention to a meeting between Opec members later today.

European bourses are expected to open with only meagre moves, with spreadbetters predicting the UK’s FTSE 100 will slip 10 points to 6,762 and Germany’s Dax to be barely changed at 10,620. US index futures suggest the S&P 500 will add half a point to 2,205.3, when trading gets under way later in New York.

What to watch

Oil prices are in focus ahead of Wednesday’s Opec meeting in Vienna. The crude market has been volatile this week — rising 2 per cent on Monday and falling nearly 4 per cent on Tuesday — on the fluctuating hopes that big producers will agree to curb output and help correct the state of oversupply in the market.

Brent crude, the international benchmark, was up 1 per cent in late Asia action at $46.85 a barrel, while West Texas Intermediate added 0.6 per cent to $45.50.

Equities

Weakness in the yen overnight has not given Japanese stocks a slight boost, with the Topix benchmark down 0.1 per cent. Australia’s S&P/ASX 200 was off 0.3 per cent, weighed down by materials and energy stocks after the drop in commodity prices on Tuesday.

Among individual shares, Samsung Electronics rose to a record high in Seoul a day after the company said it would boost its 2016 dividend and consider restructuring in an effort to allay investor concerns about its excess cash and poor corporate governance. Its shares closed flat on Tuesday, however.

Forex

The US dollar index closed 0.4 per cent lower on Tuesday despite data showing that the US economy grew a better than expected 3.2 per cent year-on-year in the September quarter. On Wednesday in Asia, it was up 0.2 per cent at 101.12 and facing a fourth straight day of declines.

The yen was 0.3 per cent weaker at ¥112.73 per dollar, having softened 0.4 per cent in the previous session.

The New Zealand dollar was a notable gainer among Asian currencies, up 0.3 per cent against the greenback to $0.7142 after the country’s finance minister said it seemed interest rates there had “hit a floor”, although he did not see a situation in which rates would rise sharply.

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