Asia shares fall on fears oil price to slow growth (AP)

BANGKOK – Asian markets fell sharply Tuesday as traders dumped shares following steep drops on Wall Street amid concerns that political unrest in Iran and Libya could send oil prices soaring and paralyze the global economic recovery.

Oil prices rose to more than $100 a barrel, and the dollar strengthened against the yen and the euro.

Japan's Nikkei 225 stock average was down 2.2 percent to 10,513.37 while South Korea's Kospi slipped 0.7 percent to 1,926.02. Hong Kong's Hang Seng index was down 1.7 percent to 23,007.29.

Investor sentiment wilted over higher fuel prices and their effect on the global economy, as unrest in oil-producing countries continued. Iran clamped down on anti-government protesters and forces loyal to Libya's leader Moammar Gadhafi launched counterattacks against rebels expanding control over the country.

Fears that the unrest might spread to Saudi Arabia, the world's largest oil exporter, is keeping many investors on the sidelines, said Matthew Lewis, head of sales trading in Sydney at CMC markets.

"The trigger, I think, is that the Libyan crisis looks like it is not going to go away as easily as it did in Egypt. Iran is showing a little bit of unrest," he said. "There is growing concern that Saudi Arabia is in the middle of that. What would happen to oil prices if there were civil unrest in Saudi Arabia?"

Australia's S&P/ASX 200 was off 0.6 percent to 4,797.80. The Australian economy grew 0.7 percent in the final quarter of 2010, according to official figures released Tuesday. That met expectations and didn't have much impact on the market, said Lewis.

Shares in New Zealand, mainland China, Taiwan and Singapore were also lower. Indian markets are closed Wednesday for the holiday of Mahashivratri.

In Tokyo, fears of a further global slowdown weighed on exporters like major electronics and car manufacturers. Toshiba Corp. was down 2.2 percent and Sony Corp. lost 2 percent. Toyota Motor Corp. was 2.5 percent lower.

Sharp Corp. dropped 4.6 percent after Morgan Stanley cut its rating in a report that went out early Wednesday, citing concerns over its LCD panel business.

Airline shares also fell on concerns over fuel prices. Qantas Airways Ltd. dipped 2.1 percent, while Cathay Pacific Airways Ltd. lost 2.3 percent. China Southern Airlines Co. Ltd. was down 4 percent and All Nippon Airways Co. Ltd. lost 2.7 percent.

The falls came after big drops in the U.S., where the Dow Jones industrial average lost 1.4 percent to 12,058.02, and the broader Standard & Poor's 500 index fell 1.6 percent to 1,306.33.

Federal Reserve Chairman Ben Bernanke told the Senate Banking Committee that a sustained increase in crude prices could pose a risk to the U.S. economic recovery. Also in the U.S., the Commerce Department said the amount of new homes and offices started by builders fell in January. The annual rate was near its decade low, set in August.

Benchmark crude for April delivery was up 38 cents at $100.01 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $2.66 to settle at $99.63 a barrel on Tuesday.

In currencies, the dollar climbed to 81.89 yen from 81.84 yen late Monday in New York. The euro slid to $1.3754 from $1.3775.

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Oil price fuels Wall Street selling (Reuters)

NEW YORK (Reuters) – Concerns that rising oil prices could hurt economic recovery prompted investors on Tuesday to sell stocks and hedge against further declines.

The CBOE Volatility Index VIX (.VIX), Wall Street's so-called fear gauge, jumped 14.5 percent to 21.01 on growing uncertainty about oil. The index measures the cost of using options as insurance against a decline in the S&P 500 (.SPX) index.

"We've been seeing how quickly the VIX can spike up, and there is no reason to believe that it won't double from where it is now," said Harry Rady, CEO of Rady Asset Management in San Diego, California.

Brent crude rose above $116 a barrel as supply disruptions persist and political violence spreads in the Middle East and North Africa. Higher oil translates into increased energy and gasoline costs for consumers.

U.S. crude and gasoline futures extended gains in extended-hours trading after data showed domestic crude inventories unexpectedly fell. U.S. stock index futures fell slightly, with S&P futures off 3.3 points.

Federal Reserve Chairman Ben Bernanke said the recent surge in oil was unlikely to derail the economy, but his comments did little to reassure investors worried that turmoil in the Middle East could hit Saudi Arabia, the world's largest oil exporter. The Dow Jones Transports index (.DJT) fell 2.5 percent.

Stocks have taken their cue from oil since the start of turmoil in the Middle East and North Africa in January. The S&P had its weakest performance since November last week but still tallied three months of gains.

The Dow Jones industrial average (.DJI) fell 169.38 points, or 1.39 percent, at 12,056.96. The Standard & Poor's 500 Index dropped 21.04 points, or 1.59 percent, to 1,306.18. The Nasdaq Composite Index (.IXIC) lost 44.86 points, or 1.61 percent, to 2,737.41.

About 8.67 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, higher than last year's daily average of 8.47 billion. Volume has recently been solid on days when the market falls, but often comes under 7 billion on up days.

Investors took a cautious stance as cyclical sectors experienced the biggest losses, while defensive sectors such as utilities, healthcare and consumer staples limited losses.

Wal-Mart Stores Inc (WMT.N) and Coca-Cola Co (KO.N) helped the Dow to limit losses. Wal-Mart rose 0.2 percent to $52.06, while Coca-Cola was up 1.5 percent to $64.91.

Gasoline and heating oil futures each gained about 3.5 percent to $3. The S&P's materials (.GSPM) index dropped 2.3 percent while the industrials (.GSPI) dropped 2.2 percent. According to AAA, the national average price of regular unleaded gasoline is currently at $3.35 per gallon.

"The real story is gasoline," said Nick Kalivas an analyst, at MF Global in Chicago. "The market is getting worried that you could see $4 gasoline in the U.S."

Financial stocks came under pressure after JPMorgan Chase & Co (JPM.N) said it could face "material" fines and "significant" legal costs from a wide-ranging probe into the industry's foreclosure practices.

JP Morgan fell 2.3 percent to $45.60 while the KBW bank index (.BKX) fell 2.3 percent.

Declining stocks outpaced advancing stocks on the NYSE by a ratio of about 3 to 1, while on the Nasdaq, decliners beat advancers by a ratio of 10 to 3.

(Reporting by Angela Moon, Editing by Kenneth Barry)

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Global stocks recover after oil price decline (AP)

LONDON – Stocks recovered their poise Friday following the previous day's sharp drop in oil prices on hopes that Saudi Arabia could make up for any shortfall in crude production from Libya.

The catalyst to Thursday's decline in oil prices was the expectation that Saudi Arabia, the world's biggest crude exporter, could pump more oil out to make up for lost supplies from Libya, which is effectively split into two after a popular uprising.

Under normal circumstances, Libya produces about 1.6 million barrels of crude per day, but its output has been heavily affected by the violence that has caused nearly 300 deaths, according to a partial count by Human Rights Watch.

In London, a barrel of Brent crude was up 15 cents at $111.51 a barrel, still $8 or so below its high point on Thursday. Meanwhile, the equivalent New York rate was down 7 cents at $97.23 a barrel, again around $5 down from the previous day's peak.

The knock-on effect on stocks has been positive as investors appeared releived that the recent sharp rise in oil prices has come to a halt, however briefly — the fear is that sky-high oil prices will choke the fragile economic recovery around the world.

In Europe, Germany's DAX closed up 0.8 percent at 7,185.17 while the CAC-40 in Paris rose 1.5 percent to 4,070.38. Britain's FTSE 100 index of leading British shares ended 1.4 percent higher at 6,001.20 after trading resumed following an earlier technical glitch that closed the market for about four hours.

In the U.S., the Dow Jones industrial average was up 0.4 percent at 12,114 around midday New York time while the broader Standard & Poor's 500 futures rose 0.8 percent to 1,316.

Libya was likely to continue to dominate sentiment as the trading week comes to a nervous end.

With reports indicating an escalation in the violence in the capital city of Tripoli, and large parts of the country under the control of opposition groups, there are fears that longtime leader Moammar Gadhafi may be preparing for a bloody showdown.

Autocratic leaders in Tunisia and Egypt have already had to quit this year following massive popular uprisings.

The biggest worry in the markets is not Libya but whether the crisis spreads through the Persian Gulf's bigger energy producers. Already Bahrain's government is facing daily protests and there are fears that Saudi Arabia's royal family may be next in line to face the wrath of its people. The announcement of a massive $36 billion package of benefits earlier this week was seen as an attempt by Saudi King Abdullah to ease popular discontent.

"If the political unrest was to spread to the world's largest oil producer, markets would have to discuss the possibility of a new oil crisis and its consequences for the global economy," said Ashley Davies, an analyst at Commerzbank.

If the crisis spreads there, experts say oil prices could reach $200 a barrel, potentially tipping the world economy back into recession.

The fragility of the global recovery was underlined by the fact that Britain contracted by a greater than anticipated 0.6 percent in the final three months of 2010, while the annualized growth rate in the U.S. for the same period was revised down to 2.8 percent from the initial estimate of 3.2 percent.

As elsewhere, the main focus in the currency markets was on events in Libya and the easing in the oil price from its most elevated levels gave the dollar a lift despite the lower-than-expected U.S. growth figures.

Elsewhere, the euro was 0.4 percent lower at $1.3756 while the dollar fell 0.2 percent to 81.75 yen.

In Asia, Japan's Nikkei 225 stock average rose 0.7 percent to close at 10,526.76 and South Korea's Kospi also added 0.7 percent, to 1,963.43. Hong Kong's Hang Seng index jumped 1.8 percent to 23,012.37.

The benchmark Shanghai Composite Index was virtually unchanged at 2,878.57, and down 0.7 percent for the week, while the Shenzhen Composite Index edged up less than 0.1 percent to 1,280.30 in lackluster trading.

____

Pamela Sampson in Bangkok contributed to this report.

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Global stocks recover after oil price decline (AP)

LONDON – Stocks recovered their poise Friday following the previous day's sharp drop in oil prices on hopes that Saudi Arabia could make up for any shortfall in crude production from Libya.

The catalyst to Thursday's decline in oil prices was the expectation that Saudi Arabia, the world's biggest crude exporter, could pump more oil out to make up for lost supplies from Libya, which is effectively split into two after a popular uprising.

Under normal circumstances, Libya produces about 1.6 million barrels of crude per day, but its output has been heavily affected by the violence that has caused nearly 300 deaths, according to a partial count by Human Rights Watch.

In London, a barrel of Brent crude was up 15 cents at $111.51 a barrel, still $8 or so below its high point on Thursday. Meanwhile, the equivalent New York rate was down 7 cents at $97.23 a barrel, again around $5 down from the previous day's peak.

The knock-on effect on stocks has been positive as investors appeared releived that the recent sharp rise in oil prices has come to a halt, however briefly — the fear is that sky-high oil prices will choke the fragile economic recovery around the world.

In Europe, Germany's DAX closed up 0.8 percent at 7,185.17 while the CAC-40 in Paris rose 1.5 percent to 4,070.38. Britain's FTSE 100 index of leading British shares ended 1.4 percent higher at 6,001.20 after trading resumed following an earlier technical glitch that closed the market for about four hours.

In the U.S., the Dow Jones industrial average was up 0.4 percent at 12,114 around midday New York time while the broader Standard & Poor's 500 futures rose 0.8 percent to 1,316.

Libya was likely to continue to dominate sentiment as the trading week comes to a nervous end.

With reports indicating an escalation in the violence in the capital city of Tripoli, and large parts of the country under the control of opposition groups, there are fears that longtime leader Moammar Gadhafi may be preparing for a bloody showdown.

Autocratic leaders in Tunisia and Egypt have already had to quit this year following massive popular uprisings.

The biggest worry in the markets is not Libya but whether the crisis spreads through the Persian Gulf's bigger energy producers. Already Bahrain's government is facing daily protests and there are fears that Saudi Arabia's royal family may be next in line to face the wrath of its people. The announcement of a massive $36 billion package of benefits earlier this week was seen as an attempt by Saudi King Abdullah to ease popular discontent.

"If the political unrest was to spread to the world's largest oil producer, markets would have to discuss the possibility of a new oil crisis and its consequences for the global economy," said Ashley Davies, an analyst at Commerzbank.

If the crisis spreads there, experts say oil prices could reach $200 a barrel, potentially tipping the world economy back into recession.

The fragility of the global recovery was underlined by the fact that Britain contracted by a greater than anticipated 0.6 percent in the final three months of 2010, while the annualized growth rate in the U.S. for the same period was revised down to 2.8 percent from the initial estimate of 3.2 percent.

As elsewhere, the main focus in the currency markets was on events in Libya and the easing in the oil price from its most elevated levels gave the dollar a lift despite the lower-than-expected U.S. growth figures.

Elsewhere, the euro was 0.4 percent lower at $1.3756 while the dollar fell 0.2 percent to 81.75 yen.

In Asia, Japan's Nikkei 225 stock average rose 0.7 percent to close at 10,526.76 and South Korea's Kospi also added 0.7 percent, to 1,963.43. Hong Kong's Hang Seng index jumped 1.8 percent to 23,012.37.

The benchmark Shanghai Composite Index was virtually unchanged at 2,878.57, and down 0.7 percent for the week, while the Shenzhen Composite Index edged up less than 0.1 percent to 1,280.30 in lackluster trading.

____

Pamela Sampson in Bangkok contributed to this report.

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