Most Asian index futures dropped amid a retreat in U.S. stocks, with crude oil back below $32 a barrel on concern support for a deal to freeze output is waning. The yen maintained gains with gold.
Japanese equity-index contracts reacted to the yen’s rebound, falling more than 1 percent in Osaka and Chicago, as futures on Australian and Korean gauges also dropped. New Zealand’s benchmark opened higher, however, and futures on Hong Kong equities signaled small gains after losses Tuesday. West Texas Intermediate crude slid 4.6 percent last session as Iran’s oil minister called a plan forged by Saudi Arabia and Russia to lock production at January levels “ridiculous.” Gold held onto a 1.5 percent advance.
“Oil prices are back in the spotlight,” Jason Wong, a currency strategist in Wellington at Bank of New Zealand Ltd. said in an e-mail to clients. “We think that it’s inevitable that oil prices move back below the $30 market soon as supply continues to outstrip demand and inventory levels are very high,” he said, describing market sentiment as “gloomy.”
Oil’s retreat weighed on U.S. stocks Tuesday along with concerns about China, after an unexpected reduction in the reference rate used by policy makers in Beijing to manage the yuan fueled angst over the state of Asia’s largest economy. A gauge of expected volatility in American equities spiked 8.3 percent, rising for the first time in seven sessions as the swing back to losses reminded investors of the sense of uncertainty and turmoil that has lingered in global financial markets since the start of the year.
Singapore updates on gross domestic product Wednesday, and both Malaysia and Vietnam issue data on prices. Australia reports on wages and Philippine trade figures are also due.
Bloomberg