Asian Markets Follow Oil Prices Higher
Mar 21st 2011 7:10AM
Updated Mar 22nd 2011 7:04AM
The price of oil is spiking in the wake of air strikes against Libya and government crackdowns against protesters in other Middle Eastern countries. Oil hit $116.19 this morning in London -- not far from the two-and-a-half year high of $120.
As the conflict in Libya escalates, analysts are predicting that Libyan oil outputs and exports will not be recovering any time soon. Paris-based IEA began warning that Libyan oil will not return to the market "for a considerable time" even before bombing commenced, reports the Financial Times. Meanwhile, at Bahrain Petroleum 90% of the company's employees went on strike last week in protest of police crackdowns on anti-government protesters, further jeopardizing the flow of oil. But Bloomberg reports that most have now returned to work.
Communications firms climbed with phone company PCCW leaping 4.6% after news spread that it's considering spinning off its telecom business and acquiring a separate listing either in Hong Kong or elsewhere. Until recently, PCCW dominated the fixed-line and broadband market in the territory, but is now facing stiff competition from newcomers like i-Cable, Hutchison Global and HKNeT. China Mobile, providing services across the Mainland, advanced 1.5%.
Hong Kong-listed Internet company China Unicom gained 1.9% and Tencent added 0.2%.
Other companies that made sharp gains today included Foxconn, which rallied 5.2%, Hutchison Whampoa, which shot up 3.4% and shoe maker Belle International, which rose 3.1%.
In China, nuclear-related shares recovered after suffering heavy losses last week in the aftermath of Japan's nuclear disasters. Dongfang Electric, which sells products like pressurizers and steam generators for nuclear power plants, gained 1.2% after falling 15% last week. The Chinese government, along with other nations such as Germany, announced it would suspend approving any new nuclear projects for the time being. Shanghai Electric, another nuclear equipment maker, rose 1.5%.
There were losses today for China's big players in the spirits sector. Kweichow Moutai, which makes the famed 106-proof alcoholic drink, sank 2.1% on lower-than-expected net income. Wuliangye Yibin , a spirit maker well known for its plum wine that generally has a more conservative alcohol content of 12% to 30%, slumped 1.8%, and Jiangsu Yanghe Brewery dropped 1.4%.