Asia report: Markets mostly lower as energy stocks soar

Markets in Asia were mostly weaker on Monday, as oil prices soared after a gathering of OPEC and other oil producers at the weekend, to agree on a production freeze.

Japan’s benchmark Nikkei 225 outperformed the region, tacking on 0.84% to close at 19,155.03, with a relatively weaker yen contributing.

It was last 0.42% weaker at JPY 115.8 per $1.

The weekend’s oil production cut meeting in Vienna led to a 3.76% rise in the stock price of Japan Petroleum Exploration and a 0.76% gain for Inpex.

Markets on the mainland stumbled, after the country’s insurance regulators said they would curb “barbaric” share purchases by insurers.

The Shanghai Composite was down 2.49% at 3,152.47m and the Shenzhen Composite slid 4.86% to 1,929.32.

South Korea’s Kospi was up 0.13% at 2,027.24, as the political corruption scandal continued following parliament’s vote to impeach President Park Geun-hye on Friday.

The country’s finance minister warned in media reports on Sunday that the impeachment could have a serious impact on sentiment in the domestic economy.

Two former government officials - an ex-presidential aide and a former vice minister - had also been indicted by authorities.

In Hong Kong, the Hang Seng Index finished down 1.44% at 22,433.02.

During the session, the financial secretary of the special administrative region John Tsang resigned from his role, after confirming he was going to run for the role of Hong Kong’s chief executive.

On the energy front, Hong Kong-listed shares in Petrochina were 0.92% higher by the close.

Oil prices were significantly higher during early Asian hours, as investors got their first chance to react to the first output-cutting meeting between OPEC producers and non-OPEC countries since 2001 in Vienna.

Analysts said any deal which results in a real cut to output would help to ease a glut of supply, which has kept prices low for two years.

“The question of whether the production agreements are adhered to is one for the future,” noted CMC Markets chief market analyst Ric Spooner.

“At this stage the safe assumption is that they will be, especially in the first few months.”

Brent crude was still surging early in European trading, with Brent crude last up 4.15% at $56.68 and West Texas Intermediate adding 4.38% to $53.86 per barrel.

Australia’s S&P/ASX 200 was up marginally, adding 0.04% to 5,562.80, with the energy sector propelling itself 2.85% to its highest levels since October last year.

On the energy front, Santos was up 5.12% and Oil Search grew 3.62%.

Further east, New Zealand’s S&P/NZX 50 finished down 0.25%, as the ruling right-wing National party confirmed former finance minister Bill English to the post of Prime Minister.

Incumbent PM John Key shocked the country and the markets by resigning at lunchtime last Monday, far earlier than expected, after almost three three-year terms in power.

Both of the down under dollars were stronger, with the Kiwi last ahead 0.48% on the greenback at NZD 1.3952 and the Aussie 0.35% stronger at AUD 1.3376 per $1.