Monday, January 11, 2016

Oil Extends Rout as Asian Stocks Pare Gains; Offshore Yuan Jumps
Emma O'Brien
Jonathan Burgos
January 11, 2016 — 10:28 PM EST

Crude fell below $31 a barrel in New York, while Asian stocks outside of Japan pared gains and the yuan jumped in Hong Kong.

Oil dropped for a seventh day after closing at a 12-year low on Monday. The Shanghai Composite Index swung between gains and losses following a $1.4 trillion rout in 2016. Japanese shares sank as they traded for the first time this week and the yen climbed 0.2 percent. The Chinese currency traded in Hong Kong’s free market climbed 0.7 percent, erasing its discount to the onshore rate. A Bloomberg gauge of dollar strength was near its highest level since at least 2005.

Concern that turmoil in China’s financial markets will spread to the economy helped spur a selloff in global equities and commodities this year, with crude tumbling 16 percent. Late-afternoon gains in consumer and technology shares wiped out losses in the Standard & Poor’s 500 Index before Alcoa Inc. opened the U.S. earnings season with a better-than-estimated profit and an 18 percent drop in sales.


The MSCI’s Asia Pacific excluding Japan measure rose 0.2 percent, after gaining as much as 0.8 percent earlier. The gauge dropped 2 percent last session to its lowest level in more than four years.

Australia’s S&P/ASX 200 Index added 0.2 percent to snap a seven-day losing streak. BHP Billiton Ltd., the world’s biggest mining company, sank 2.7 percent to an 11-year low.

The Shanghai Composite Index rose 0.4 percent after dropping below the 3,000 level for the first time since September. The gauge sank 5.3 percent on Monday, extending the world’s biggest selloff this year. The Hang Seng Index gained from its lowest close since 2013. The Philippine benchmark equity index rallied 1.5 percent after entering a bear market on Monday.

“Another heavy selloff yesterday driven by China concerns means there is the potential for a short-term bounce today,” Angus Nicholson, a market analyst in Melbourne at IG Ltd., said in an e-mail to clients. “There has been a bit of a rally coming into U.S. markets just before the close. The big question is whether this is only a ‘dead-cat bounce’ and traders may just be looking to sell into the rally.”

S&P 500 Index futures inched higher, after the index ended last session up 0.1 percent amid volatile trading conditions. The Dow Jones Industrial Average rose 0.3 percent Monday to 16,398.57, advancing for the first time in four days.

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