Oil prices climb further, while Asian shares are mixed
Shares were mixed in Asia, while oil prices advanced further on Tuesday after jumping the day before due to uncertainty over when the Strait of Hormuz could reopen and get the global flow of crude going again.
US futures edged lower.
Brent crude oil gained 1.5 per cent to USD 89.01 a barrel, while US benchmark crude picked up 1.7 per cent to USD 83.54 a barrel.
Brent surged 5 per cent on Monday. It swung between USD 72 and USD 102 last month as hopes rose and fell that the United States and Iran could reach an agreement that would allow oil tankers to freely exit the Middle East again to deliver crude worldwide.
Stocks wavered in Asia after the US market edged away from its all-time highs.
South Korea’s Kospi gained 0.7 per cent to 6,345.53 as shares in market heavyweight Samsung Electronics jumped 4.1%. Memory chipmaker SK Hynix advanced 0.4%.
The wild swings of recent weeks, driven by waxing and waning hopes for a lasting boost to corporate profits from artificial intelligence, have abated in the past several days.
“Broadly, for the Korean memory chipmakers, the past year’s chip mania could well be over, even though Korean chipmakers will continue to benefit from the massive AI buildout,” Ipek Ozkardeskaya, a senior analyst at Swissquote, said in a commentary.
Markets in Tokyo were closed for a holiday.
In Hong Kong, the Hang Seng lost 1 per cent to 25,677.11, while the Shanghai Composite index gave up 0.9 per cent to 3,932.93.
Australia’s S&P/ASX 200 edged 0.2 per cent higher to 9,250.60 after the Reserve Bank of Australia opted to keep its benchmark interest rate unchanged at 4.35 per cent.
Taiwan’s Taiex rose 0.4 per cent and the Sensex in India shed 0.6 per cent.
On Monday, the S&P 500 slipped 0.1 per cent from its record set on Friday. The Dow Jones Industrial Average dipped 0.1 per cent and the Nasdaq composite fell 0.3 per cent.
The recent rally, powered by soaring profits for US companies, has slowed. Reports are on track to show earnings per share leaped 50 per cent in the spring from a year earlier for companies in the S&P 500, according to FactSet.
That would be the best growth since five years ago, when the economy was roaring out of the chasm created by the COVID-19 pandemic.
Berkshire Hathaway, famous for buying stocks at what it considers low prices, gained 1.5 per cent. It is one of the latest companies to deliver a stronger profit for the last quarter than analysts expected.
MarineMax jumped 46.1 per cent after the retailer, marina operator and superyacht services provider said it agreed to sell itself for about USD 1.5 billion in cash to a portfolio company of Blackstone.
Varex Imaging leaped 48.8 per cent after Teledyne Technologies said it would buy the maker of X-ray imaging components for USD 18.90 per share in cash.
But Intel helped offset such gains and fell 4.1 per cent after saying it may sell USD 15 billion of its stock. Such a move would dilute the ownership stakes of shareholders, and Intel said it would likely use the cash for investments to take advantage of the huge spending underway on AI technology.
The main event for Wall Street this week will likely be Wednesday’s update on inflation in July. Economists expect it slowed to 3.4 per cent from 3.5 per cent in June, and that would relieve pressure on the Federal Reserve to raise interest rates.
Higher rates would help keep a lid on inflation, but they would also slow the economy by making it more expensive for US households and companies to borrow money. They would also undercut prices for stocks and other investments.
In other dealings early Tuesday, the US dollar fell to 159.20 Japanese yen from 159.30 yen. It has been inching higher despite a recent rate intervention in the markets by Japan and the US to help raise the yen’s value against the dollar.
The euro fell to USD 1.1536 from USD 1.1544.
The price of gold, often used as a hedge against risk in times of uncertainty, edged up 0.1 per cent to USD 4,425.50 an ounce.