TOKYO – European shares made modest gains in early trading Wednesday as oil prices stabilized after their recent rout and Japan reported stronger-than-expected machinery orders. Asian markets were mostly lower.
KEEPING SCORE: Britain’s FTSE 100 rose 0.4 per cent to 6,159.36 and France’s CAC 40 gained 0.6 per cent to 4,711.71. Germany’s DAX added 0.3 per cent to 10,706.80. Wall Street looked likely to follow Europe’s lead. Dow futures were up 0.2 per cent at 17,576.00 and S&P 500 futures rose 0.2 per cent to 2,062.40.
ENERGY: Oil prices rose after major losses on Monday, with U.S. crude oil gaining 64 cents, or 1.7 per cent, to $38.15 in electronic trading on the New York Mercantile Exchange. It fell 14 cents to $37.51 on Tuesday, near a seven-year low. Brent crude, the international benchmark, rose 50 cents to $40.76 in London. But muted demand and oversupply are still hanging over the energy markets, analysts said.
THE QUOTE: Volatility in the junk bond market is largely being driven by the collapse in oil prices, Angus Nicholson of IG said in a commentary. With no relief in sight, “the debt-laden and marginal energy players are increasingly likely to be pushed to the verge of bankruptcy. This has driven up junk bond yields and in turn weighed on the equity markets,” he said.
JAPAN MACHINERY: Orders for machinery, which tend to be a relatively volatile indicator for corporate investment, jumped 10.7 per cent from the previous month in October. Data showed strong foreign demand and surging orders for railway cars and aircraft.
ASIA’S DAY: Japan’s Nikkei 225 fell 1.0 per cent to 19,301.07, despite the upbeat machinery data, and Hong Kong’s Hang Seng lost 0.5 per cent to 21,803.76. Australia’s S&P/ASX 200 dropped 0.6 per cent to 5,080.50. South Korea’s Kospi was barely changed at 1,948.24 and the Shanghai Composite Index rose 0.1 per cent to 3,472.44. Most markets in Southeast Asia were lower.
CURRENCIES: The U.S. dollar was trading at 122.71 yen, down from 122.99 yen in the previous session. The euro rose to $1.0911 from $1.0888.