Globle Scene

Oil prices higher in Asia on Mideast conflict

World oil prices rose in Asian trade Monday, fuelled by the ongoing conflict in the Middle East after Israel stepped up its military onslaught on Gaza, analysts said.

New York’s main contract, light sweet crude for February delivery, gained 65 cents to 46.99 dollars a barrel. The contract closed 1.74 dollars higher at 46.34 Friday on the New York Mercantile Exchange.

Brent North Sea crude for February delivery was trading 1.09 dollars higher at 48.00 dollars Monday after closing 1.32 dollars higher at 46.91 dollars Friday.

“The Gaza conflict added to the geopolitical risk premium embodied in the oil price,” said David Moore, a Sydney-based commodity strategist with the Commonwealth Bank of Australia.

Israel poured ground troops into Gaza late on Saturday, stepping up an eight day long bombing campaign of Hamas targets, aimed at ending the Islamist movement’s rocket attacks across the border. Despite the spike in oil prices, analysts said the rally was likely unsustainable because of low energy demand caused by a weak global economy.

“It looks like the equity markets have stabilised... (but) overall, the market doesn’t look good,” said Tony Nunan, manager for energy risk management for Mitsubishi Corp.

“I’m not confident of the market rallying again,” he said.

Meanwhile, a row that has seen Moscow cut gas supplies to the Ukrainian market was also a concern for the market, analysts said.

SINGAPORE, Monday, AFP

Swedish firms planning large layoffs in 2009: Survey

After shedding tens of thousands of jobs in recent months, Sweden should prepare for a new wave of layoffs in 2009, a survey of some of the country’s top business leaders showed Saturday.

In a telephone survey conducted by the Regi polling agency last month of the chief executives of 100 companies listed on the Stockholm stock exchange, 39 percent said their staffing needs would decline in 2009, the Dagens Industri business daily reported.

Another 38 percent of those questioned meanwhile said they were not planning to hire any new staff this year.

On average, staffing needs in the 100 companies are expected to decline by 12 percent in 2009, Dagens Industri said, adding that most of the cuts were planned in the heavy industry sector.

Sweden’s unemployment rate stood at 6.2 percent in November, according to the national statistics agency, but as the global economic downturn tightens its grip, the government expects the jobless rate to swell to 7.7 percent this year and to 8.5 percent in 2010.

STOCKHOLM, Monday, AFP

Dollar rises against yen

The dollar gained on the yen in Asian trade on Monday as expectations grew that US president-elect Barack Obama’s stimulus plans would give a boost to the ailing economy, dealers said.

But they said market players were reluctant to buy the greenback heavily ahead of the release of key economic indicators due this week, including Friday’s key employment report that is expected to show a wave of layoffs.

The dollar rose to 92.05 yen in Tokyo morning trade, up from 91.79 yen in New York late Friday. The euro gained to 1.3928 dollars from 1.3910 and to 128.15 yen after 127.72.

“High expectations for Obama appear to be supporting US stocks and the dollar, although conditions surrounding the US economy are still pretty negative,” said Yosuke Hosokawa, head of forex at Chuo Mitsui Trust Bank. Traders in Tokyo were relieved that there was no major bad news related to the economic crisis during the New Year holidays, Hosokawa said.

Global stock markets have started 2009 on an upbeat note on hopes the US economy will start to recover this year.

But “it is still unlikely the dollar will continue to rise from current levels as players expect bad job figures” on Friday, Hosokawa said.

“Risk-aversion is expected to continue this year as players are still cautious about the prospects” for the US and global economies, he added.

TOKYO, Monday, AFP

Indian shares close high

Indian shares provisionally closed 3.36 percent higher on Monday, propelled by rate cuts and an economic package to boost faltering economic growth.

India slashed its main lending rate by 1 percentage point late on Friday, its fourth cut in as many months, eased overseas borrowing and enhanced tax breaks. The 30-share BSE index .BSESN provisionally rose 334.32 points to 10,292.54.

MUMBAI, Monday, Reuters

Asian stocks rally on economic recovery hopes

Asian stocks rose on Monday, with Tokyo hitting the highest level for almost two months as investors hoped that the US economy would start to recover this year after a dire 2008.

Investors took their cue from Wall Street, where shares soared on Friday on expectations that US president-elect Barack Obama’s massive stimulus plan would help to revive the recession-hit economy. Tokyo’s Nikkei-225 index closed 2.07 percent higher in a half day of trading, its first of 2009, ending above the 9,000-point level for the first time since November 10.

Elsewhere in early trade, stocks climbed 2.0 percent in Hong Kong, 1.40 percent in Shanghai, 2.92 percent in Taipei, 2.06 percent in Seoul and 0.6 percent in Sydney. “Stocks are gaining support from the stronger stock market in the United States and expectations of a recovery in the US economy this year,” said Makoto Sengoku, a market analyst at Tokai Tokyo Securities.

A weaker yen gave a boost to Japanese exporters, which have been hit hard by the recent strength of the Japanese currency, he said. Dealers said they were also encouraged to buy shares as fears of a collapse of the US auto industry receded after the US government approved a financial rescue package in December.

But “there still remain concerns over corporate profits and the overall economy both in the United States and in Japan,” said Ryuta Otsuka, a strategist at Toyo Securities. “In the longer term, stock prices may remain fragile,” Otsuka said. Stock markets in the United States, Europe and much of Asia rose sharply on Friday on hopes for a brighter year ahead after a horrendous 2008 that saw Wall Street’s Dow Jones index plunge 33.84 percent, the worst loss since 1931.

The Dow Jones Industrial Average surged 258.30 points, or 2.94 percent, Friday to finish at 9,034.69. Obama, who takes office on January 20, has already pledged stepped-up efforts to revive the moribund economy in the face of the worst global financial crisis since the Great Depression.

“After a terrible year, it is no surprise to have a technical rebound, in particular after a strong showing on Wall Street,” President Securities analyst Johnny Lee said. But there were worries about how long the New Year rally would last.

“Looking ahead, there are few clear market-moving factors which would further push up share prices, in terms of both economic indicators and corporate earnings,” said Otsuka at Japan’s Toyo Securities.

Dow Jones Newswires contributed to this story.

TOKYO, Monday, AFP