Asian stocks decline as material producers slump with oil

The Straits Times Index bucked the trend as Asian stocks dipped following a drop in global oil prices.
The Straits Times Index bucked the trend as Asian stocks dipped following a drop in global oil prices.PHOTO: REUTERS

HONG KONG (BLOOMBERG) - Asian stocks dropped from the highest level in two years as material producers halted gains as the price of crude oil slipped. Noble Group slid to a 16-year low after S&P Global Ratings cut its credit rating.

MSCI Asia Pacific Index slipped 0.2 per cent to 151.93 as of 5:26 p.m. in Hong Kong. Australia's main stock index fell 0.2 per cent as BHP Billiton and Fortescue Metals Group led declines in commodity producers. Japan's Topix Index lost 0.2 per cent as the yen strengthened amid the latest reports on US President Donald Trump and his administration.

The Straits Times Index was an exception, rising 0.28 per cent or 9.12 points to 3,222.69.

Political wrangling in Washington returned to the fore, taking the focus away from global economic growth, after the Washington Post reported that Mr Trump asked intelligence chiefs to publicly deny any collusion between his campaign and Russia. Oil halted its advance after a four-day gain before the Organization of Petroleum Exporting Countries meets lastThursday to decide on output.

"Most investors have much less enthusiasm toward the equity market with a lack of main catalysts," said Komsorn Prakobphol, an investment analyst at Tisco Financial Group Pcl in Bangkok. "The wrangling noises in U.S. politics should spur concern about a delay in implementing tax cuts and other economic policies, while oil prices may be bound for some correction after rallying."

Noble Group plunged 28 per cent in Singapore before shares were halted. S&P said the commodity trader could default on its debt over the next year as it spirals further into distress. S&P cut its long-term rating three notches to CCC+ before the company requested a trading halt on its stock pending an announcement.