Asia: Stocks tumble after oil prices flirt with seven-year low

Asian stocks plunged on Tuesday, after oil benchmarks tumbled to their lowest level in almost seven years, dragging energy stocks sharply lower.

Crude prices stabilised during Asia trading but West Texas Intermediate remained below the $38 a barrel mark, while Brent was marginally above $41 dollar.

Hong Kong’s Hang Seng Index fell 1.34%, while the Shanghai Composite Index tumbled 1.89% despite marginally better-than-expected trade data for November.

Exports fell 6.8%, their fifth straight month of decline and a sharper drop than expected, while imports were down 8.7%, slightly better than consensus calling for an 11.8% decline.

The overall trade surplus came in at 343 billion yuan or $53bn.

“Chinese export numbers fell sharply to post -6.8% instead of the -5% that was expected. This has spooked the market a little but nowhere near as much as negative China data would have done prior to us being a little more certain about the Fed’s next decision,” said James Hughes, chief market analyst at GKFX.

Japan’s Nikkei Stock Average fell 1.04%, even though gross domestic product data showed Asia’s second largest economy avoided a recession in the third quarter.

According to figures released by the Cabinet Office on Tuesday, Japan’s GDP expanded to 0.3% in the third quarter, compared with an initial estimate of a 0.2% decline and with analysts’ expectations of a 0.1% gain.

On a year-on-year basis, the economy grew 1% in the third quarter, beating the initial estimate of a 0.8% decline.

“With underlying inflation still strong, the Bank of Japan will likely leave policy settings unchanged at its January meeting unless next week’s tankan disappoints significantly,” said Marcel Thieliant, Japan economist at Capital Economics.

Elsewhere, Australia’s S&P/ASX 200 fell 0.91%, as mining giants BHP Billiton and Rio Tinto fell 5.23% and 4.29% respectively as oil prices slumped.

On the currencies front, the yen gained 0.10% against the dollar, while the Australian dollar slumped 0.56% against its US counterpart.