Asian stocks down, oil prices up on Mideast woes

Tuesday, 1 March 2011 00:03 - - {{hitsCtrl.values.hits}}

HONG KONG, (AFP) - Asian shares mostly rose Monday, extending gains at the end of last week, but concerns over turmoil in the Arab world and higher oil prices continued to weigh on sentiment.

Tokyo ended 0.92 percent, or 97.33 points, higher at 10,624.09 and Hong Kong was 0.79 percent up by the break while Shanghai rose 0.74 percent.

Sydney was 0.12 percent, or 6.0 points, lower at 4,830.5 before trading was stopped early due to a technical glitch. No decision had been made by 0600 GMT on when dealing would begin again.

The advances follow Friday’s broad gains after a tough week that saw heavy selling as oil prices soared on the back of violence in the Arab world, which stoked supply concerns.

Libya’s Moamer Kadhafi came under further pressure as he lost control of several towns while world leaders condemned his heavy-handed crackdown that has seen hundreds killed and the United Nations impose travel bans on his regime.

In Tunisia, prime minister Mohammed Ghannouchi resigned as security forces clashed with demonstrators in Tunis while Yemen’s leader faced calls to end his three-decade rule and the sultanate of Oman was also hit by violence.

In afternoon trade oil was up, with New York’s main contract, light sweet crude for delivery in April, gaining $1.62 to $99.50 per barrel.

Brent North Sea crude for April delivery gained $1.84 to $113.98.

“The unrest in the Middle East and fears that the situation will worsen are still supporting oil prices despite news that Saudi Arabia will increase output,” said Ong Yi Ling, investment analyst for Phillip Futures in Singapore.

Chinese Premier Wen Jiabao’s comments on Sunday that the government would aim for seven percent annual growth over the next five years had little impact on markets in the afternoon.

The new target is lower than its usual target of eight percent and comes as China tries to rein in its soaring economy and rising inflation, which it says is key to avoiding social instability.

The economy grew 10.3 percent in 2010.

“The comments (from Wen) suggest further, multi-pronged monetary tightening, more curbs on the real estate market, and a stronger yuan,” Credit Agricole said in a note to clients, according to Dow Jones Newswires.

However, Zhou Lin, an analyst from Huatai Securities, said: “I can’t see any impact of the number on the market for now” as historically the actual outcomes have mostly outpaced such targets.”And Li Xin, an analyst from China Development Bank Securities said the move had been flagged in advance and factored in by investors.