Asia stocks slip, oil near six-month peak
as U.S. prepares to tighten Iran sanctions
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[April 22, 2019]
By Shinichi Saoshiro
TOKYO (Reuters) - Asian shares slipped on
Monday, weighed down by underperforming Chinese stocks, while oil prices
rallied on news the United States is likely to ask all importers of
Iranian oil to end their purchases or face sanctions.
Brent and U.S. crude futures surged to nearly six-month highs on news
reports that U.S. Secretary of State Mike Pompeo will announce "that as
of May 2, the State Department will no longer grant sanctions waivers to
any country that is currently importing Iranian crude or condensate."
The potential disruption to Iranian supplies are expected to add to an
already tight oil market.
"The U.S. chief Iran hawks indeed have the President's ear as (Secretary
of State) Pompeo and (National Security Advisor) Bolton are singularly
focused on bringing Iran's economy to its knees," said Stephen Innes,
head of trading at SPI Asset Management.
"Predictably oil prices are rising," he said.
Following the Good Friday holiday, markets in Britain, Germany and
France will remain closed for Easter Monday, while those in the United
States will reopen.
The S&P 500 e-minis were down 0.19 percent.
Asian equities dipped after Chinese stocks retreated from a 13-month
high as comments from top policymaking bodies raised investor fears that
Beijing will slow the pace of policy easing after some signs of
stabilization in the world's second-largest economy. [.SS]
MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.3
percent, edging away from a nine-month peak scaled last week after
Chinese economic data beat expectations and eased concerns about the
health of the world economy.
The Shanghai Composite Index was down 1.3 percent, South Korea's KOSPI
edged down 0.2 percent and Japan's Nikkei was little changed.
In currencies, the dollar index against a basket of six major currencies
was a touch lower at 97.391.
The index was still within touching distance of a 1-1/2-month peak
reached on Thursday after steady U.S. retail sales data.
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Pedestrians are reflected on an electronic board showing stock
prices outside a brokerage in Tokyo, Japan December 27, 2018.
The euro was little changed at $1.1239, having taken a hit late last
week after purchasing managers' index (PMI) releases showed weak
manufacturing activity in Europe.
The dollar was steady at 111.925 yen.
The Australian dollar, sensitive to shifts in risk sentiment, inched
down 0.25 percent to $0.7137.
The Canadian dollar, on the other hand, added 0.25 percent to
C$1.3363 thanks to a bounce in crude oil prices.
Brent crude futures were up 2.5 percent at $73.76 per barrel after
brushing $74.31, the highest since Nov. 1, 2018.
U.S. crude futures climbed to $65.87 per barrel, highest since Oct.
The U.S. reimposed sanctions in November on exports of Iranian oil
after President Donald Trump unilaterally pulled out of a 2015
nuclear accord between Iran and six world powers. Washington is
pressuring Iran to curtail its nuclear program and stop backing
militant proxies across the Middle East.
Crude extended gains from last week, when a drop in crude exports
from OPEC's de facto leader, Saudi Arabia, and a draw in U.S.
drilling rigs and oil inventories supported prices. [O/R]
Spot gold was up 0.26 percent at $1,278.11 an ounce, bouncing from
$1,270.63 in the previous session - its lowest since Dec. 27, 2018.
Gold is positively correlated to oil as the metal is often seen as a
hedge against oil-led inflation. [GOL/]
(Reporting by Shinichi Saoshiro; Additional reporting by Henning
Gloystein in Singapore; Editing by Shri Navaratnam and Jacqueline
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