Asian energy firms rally with oil after US strikes Syria

Hong Kong: Asian energy shares rallied with oil prices on Friday after the US launched missile strikes on Syria, fanning geopolitical concerns in the crude-rich Middle East and raising the prospect of friction with Russia.
Eyes are also on Florida as Chinese President Xi Jinping and Donald Trump move into day two of a relationship-building summit, which comes after months of accusations by the US tycoon that Beijing was killing US jobs and manipulating its currency.
Trump ordered a huge assault on a airfield in retaliation for a chemical attack in Syria that Washington blamed on President Bashar al Assad.
The attack came just hours after Russia warned that there could be “negative consequences” if the US took military action against Syria, which it is backing in a civil war.
The news sent stocks, which had been mostly in the black, into reverse and safe-haven assets such as the yen and gold soaring. Oil prices initially surged two per cent.
“The untimely news of the US missile strike, coupled with tonight’s impending US non-farm payrolls, have created increased anxiety among investors,” Gary Huxtable, client adviser at Atlantic Pacific Securities, said in a note. The US is due to release closely watched jobs data later in the day.
Energy firms were the big gainers, with Hong Kong-listed PetroChina jumping more than two per cent and CNOOC up 1.5 per cent, while Australia’s Woodside Petroleum was 1.3 per cent higher and Inpex in Tokyo surged four per cent.
The news dragged on the majority of Asia’s stock markets but the early plunges were either pared or reversed by the end of the day. Seoul closed down 0.1 per cent and Singapore was off 0.5 per cent, while Wellington, Taipei, Jakarta and Bangkok were also in the red.
However, Tokyo ended 0.4 per cent up despite a soaring yen, which was sitting at lows not seen since November.
Shanghai added 0.2 per cent and Sydney ended up 0.1 per cent.
Hong Kong stocks barely moved on Friday, with strength in energy stocks offset by the confidence-sapping news of the United States firing cruise missiles at an air base in Syria.
The benchmark Hang Seng index and the Hong Kong China Enterprises Index pared earlier losses and were roughly flat at 24,267.30 and 10,273.80, respectively.
For the week, the Hang Seng was up 0.6 per cent.
Sentiment in Hong Kong was already soft as investors awaited the outcome of US President Donald Trump’s talks with his Chinese counterpart Xi Jinping, expected to cover North Korea and China’s big trade surplus with the United States.
Linus Yip, strategist at First Shanghai Securities Ltd, said the missile attack on Syria was the main reason for Friday’s sluggishness in Hong Kong.
“But there’s no need to panic, what will come out of Trump and Xi’s meeting is more important.”
Yip said sentiment would get a boost if Trump softens his tough stance on China, which he has repeatedly blamed for stealing American jobs and dumping exports by cheapening its yuan currency.
Gold, which along with the yen is considered a safe bet in times of turmoil and uncertainty, also jumped more than one per cent to $1,266.
Oil prices, which had been lower in early morning trade, jumped as the attacks led to concerns about supplies in the Middle East. However, the gains were pared in the afternoon and both main contracts were about 1.5 per cent higher.
“Syria is not a big oil producer but it does potentially increase the risk of escalation in the whole region,” Ric Spooner, chief market analyst at CMC Markets in Sydney, told Bloomberg News. “We’re seeing a risk response to the airstrike.”
The attacks on Syria overshadowed talks in Florida between Trump and Xi, which are being closely monitored by investors worried that the former reality TV star’s anti-globalisation comments could spark a trade war between the economic superpowers.
Also on the agenda is North Korea, with Washington concerned about the country’s growing nuclear programme following a series of missile launches, the most recent coming this week.
As the two leaders met, Trump told reporters he thought they would have “a very, very great relationship and I look very much forward to it”.
In early European trade London slipped 0.2 per cent, Paris slipped 0.3 per cent and Frankfurt gave up 0.5 per cent. — AFP