HONG KONG (AP) — Share prices sank in early trading Monday after an effort by major oil producing nations to agree on production cuts failed over the weekend.
Japan’s Nikkei 225 stock index dropped 2.7 percent to 16,389.93 while Hong Kong’s Hang Seng index lost 0.9 percent to 21,129.68. South Korea’s Kospi lost 0.5 percent to 2,004.61, while Australia’s S&P/ASX 200 was nearly flat at 5,225.00. Most other markets were also lower.
Oil prices rebounded slightly by mid-morning in Asia after falling by nearly 7 percent after Iran stayed away from a weekend meeting in Qatar of 18 oil producing nations that had been expected to reach an accord on freezing production to support crude oil prices.
“Expectations for the talks to end with an agreement were high, and the lack of one damaged the credibility of future meetings to support the oil market,” Bernard Aw of IG said in a commentary.
“Asia is set for a negative start to the week, given this development. Commodities are expected to be beaten back today, and this would have consequences for equities, especially energy and material counters,” he said.
U.S. crude oil fell $2.00 to $38.36 a barrel in electronic trading on the New York Mercantile Exchange, down 4.9 percent. It sank to a low of $37.61 a barrel, down 6.8 percent before regaining some of that loss.
Brent crude oil, which is used to price international crude oil, fell $1.72 to $41.40 a barrel early Monday, down 3.9 percent. It tumbled 7 percent in earlier trading.
Oil prices hit a 12-year low in January, dipping under $30 a barrel, but had risen above $40 in recent days, buoyed by bullish talks surrounding the Doha meeting.
In currency trading, the dollar was at 108.18 yen down from 108.81 yen last Friday. The euro rose to $1.1294 from $1.1282.