Crude continue to boil

Crude continue to boil

- in economy

New Delhi: Asia-Pacific stock markets continued this week’s gains helped by an overnight rally in the US. As broadly expected, Trump’s announcement has helped light a fire under oil. Both main oil contracts, which rose around 3% yesterday, are almost 1% up today again.

Unless there are some production increases from the OPEC/Non-OPEC accord to offset the drop in Venezuelan production and the expected decline of the Iranian output, prices could go even higher. US bond yields again have penetrated the psychological +3% figure, while Dollar rallied for a fourth consecutive session, pressurizing emerging-markets pairs. Meanwhile emerging market investors got another jolt after a stunning election upset in Malaysia as reflected by the US-traded iShares MSCI Malaysia ETF, which plunged 6% overnight to a one-year low.

Domestic markets are likely to open on a positive note taking cues from their Asian peers. Trading activity is expected to remain stocks specific with Q4 results currently underway. A surge in crude prices to almost $78 a barrel could be a major worry for Dalal Street, as it may push US treasury yields even higher and trigger more foreign outflows from emerging markets, including India.

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