Asian petchem shares, oil prices rise on global recovery hopes

02:06' PM - Thursday, 21/05/2020

Asian petrochemical shares rose on Thursday while crude oil extended recent gains on hopes of a recovery in global economic activity in the second half of the year.

At 03:33 GMT, Asahi Kasei was up by 1% in Tokyo, Formosa Petrochemical Corp was 0.88% higher in Taipei and LG Chem jumped nearly 5% in Seoul.

Japan's Nikkei 225 slipped by 0.05%, Hong Kong's Hang Seng Index rose by 0.14% and Singapore's Straits Times Index was up by 0.09%.

"Markets are likely to remain volatile as investors await for more clarity on how the reopening of the various economies will fare," Singapore's OCBC Bank said in note.

Overnight, US-listed shares of chemical companies rose amid rising oil prices and the rally seen on Wall Street.

US stocks climbed to more than 10-week highs on Wednesday as investors focused on signs the American economy will continue to reopen.

"However, casting a shadow on the optimism was the US Senate’s passage of a bill to delist Chinese companies from US stock exchanges if it cannot certify it is not under the control of a foreign government," OCBC said.

The gains in Asian equity markets on Thursday were capped by poor economic data from Japan and South Korea.

Japan's exports fell by 21.9% year on year in April as shipments to the US slumped and China slumped.

Exports to China, Japan’s largest trading partner, fell 4.1% in the year to April amid sharp drop in demand for chemical products, Ministry of Finance (MOF) data showed.

The au Jibun bank flash manufacturing purchasing managers' index (PMI) for Japan fell to 31.7 in May, its lowest since March 2009 following a severe decline in production and demand.

South Korea's exports slumped by 20.3% year on year in the first 20 days of May, as the coronavirus pandemic continued to weigh on demand overseas, customs data showed.

The country's exports fell by 24.3% year on year in April.

Globally, there have been 4.8m confirmed cases of the coronavirus as of 20 May, including 318,935 deaths, the World Health Organization said in its latest update. - ICIS -

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