Kuala Lumpur — Asian stocks were mixed Tuesday as concerns over an OPEC oil production cut and Italy’s constitutional referendum cast a pall on the markets, AP reports.
KEEPING SCORE: The Shanghai Composite Index gained 0.4 percent to 3,290.22 and Sydney’s S&P-ASX 200 rose 0.3 percent to 5,482. Hong Kong’s Hang Seng index was almost flat at 22,838.06, as is Seoul’s Kospi at 1,978.06. Tokyo’s Nikkei 225 gave up 0.2 percent to 18,322.58 and benchmarks in Philippines and New Zealand also fell.
OPEC WATCH: The Organization of the Petroleum Exporting Countries meets Wednesday to discuss output cuts to boost prices. Iraq’s Oil Minister reaffirmed his intention to work toward a possible agreement boosted oil prices overnight. However, Iran’s minister has warned that “politics may make an OPEC decision harder,” undermining sentiments. The price of the benchmark U.S. oil fell 20 cents to $46.88 a barrel in electronic trading on New York Mercantile Exchange. The contract jumped $1.02 to close at $47.08 a barrel on Monday. Brent crude, the international standard, eased 29 cents to $49.92 a barrel in London, from $48.79 on Tuesday.
ITALY VOTE: Italians vote on constitutional changes on Dec. 4 that would limit the power of the upper house and make it easier for governments to pass legislation. Prime Minister Matteo Renzi has said he will resign in case of a “no” result. New elections, if held, could bring to power the Five Star Movement, which has said it wants to hold a referendum on euro membership.
ANALYST TAKE: Mizuho Bank said the focus is on whether a deal to cut production will be reached at the OPEC meeting. “Oil prices are likely to remain choppy, fluctuating in tandem with news flow,” it said in a report. Worries over Italy’s constitutional referendum also loom. “Apart from political instability, a negative referendum outcome could hurt Italian banks and renew financial stress in the European Union,” DBS Bank in Hong Kong said in a report.
US DATA: U.S. stocks declined Monday as a remarkable rally in November since the upset victory of Donald Trump in the presidential election fizzled out. Investors are waiting for third-quarter economic data later Tuesday that will set the tone for U.S. equities and currency. The Dow Jones industrial average lost 0.3 percent to 19,097.90 on Monday. The Standard & Poor’s 500 index fell 0.5 percent to 2,201.72 and the Nasdaq composite shed 0.6 percent to 5,368.81.
CURRENCIES: The euro rose to $1.0592 from $1.0587, while the dollar fell to 112.20 yen from 112.65 yen.