Hong Kong Shares Slide, Oil Prices Edge Back

Hong Kong shares sank more than 2 percent in the morning session on Tuesday in line with a sell-off across Asian markets, but oil prices bounced back after historical plunge overnight in New York.

The Hang Seng Index dropped 2.3 percent, to 23,772.

On the mainland, the Shanghai Composite Index lost 1.4 percent to 2,813, while the Shenzhen Composite Index fell 1.6 percent to 1,740.

Tokyo ended the morning 1.6 percent lower, while Sydney, Seoul, Taipei and Manila were also more than 1 percent lower.

Singapore shed 0.8 percent, and there were also losses in Jakarta and Wellington.

Analysts warned the drop in stocks could be an indication that the recent surge may have been too much too quick and another sell-off is possible.

The flight to safety was reflected in currency markets, where the US dollar soared against high-yielding, riskier units. The South Korean won, Australian and New Zealand dollars and Russian ruble were all down more than one percent, while the Indonesian rupiah sank 0.9 percent.

US crude prices bounced back into positive territory on Tuesday, a day after crashing below UD$0.00 for the first time owing to crippled demand and a storage glut.

West Texas Intermediate for May delivery was changing hands at US$1.10 a barrel after diving to an unprecedented low of minus US$37.63 in New York as the pandemic brings the global economy, transport and factory activity to a halt.

The sell-off in May futures came because the contract expires later on Tuesday, meaning traders needed to find buyers to take physical possession of the oil – a job made near-impossible as storage becomes scarce.

However, focus is now on the June contract, which had trading volumes more than 30 times higher. That rose towards US$21 a barrel, from US$20.43 on Monday.

Brent crude, the international benchmark, was changing hands at US$25.75 for June delivery. (AFP)

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