HSI Falls As Oil Prices Continue Wild Fluctuation

Hong Kong shares finished Wednesday morning in negative territory, tracking losses across the world linked to a rout in oil markets, with energy firms taking a hit.

The Hang Seng Index dropped 0.6 percent, to 23,659.

On the mainland, the Shanghai Composite Index was down 0.2 percent to 2,822, while the Shenzhen Composite Index edged down 0.1 percent to 1,751.

By the break, Tokyo was down 1.2 percent while Sydney fell 0.5 percent. Seoul, Singapore, Manila and Wellington all lost more than 1 percent. 

"The oil reality check has triggered a reassessment across risk assets with the global equity board a sea of red," said Rodrigo Catril at National Australia Bank.

Adding to the sense of unease on trading floors is uncertainty around earnings season, with many firms struggling to provide forecasts as they try to assess developments in the pandemic, which has shattered their bottom lines.

"There's no way you can predict earnings right now," Michael Cuggino, at Pacific Heights Asset Management, told Bloomberg TV. "It's virtually impossible until we have more visibility with respect to how the world comes out of the coronavirus on the other side."

Both main oil contracts struggled to maintain early gains on Wednesday following another painful rout.

With demand virtually non-existent owing to virus lockdowns, and production still high despite storage at bursting point, crude markets have been sent into freefall with West Texas Intermediate (WTI)  for May delivery diving to minus US$40 on Monday.

Focus has turned to the June contract, which was faring slightly better but still lost almost half its value on Tuesday, while Brent collapsed by a fifth.

In early trade on Wednesday, WTI bounced 20 percent but was unable to maintain all the gains, while Brent went into reverse. (AFP)

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