Asian markets open higher; oil prices fall as investors wait Trump’s decision on Iran deal

Big 5

Asian markets edged up on Tuesday, with oil prices tracking lower following President Donald Trump’s announcement that he would make a decision on the Iran nuclear deal on Tuesday during U.S. hours.

The Nikkei 225 reversed early weakness to tack on 0.28 percent and the Topix edged up by 0.41 percent, with 24 of its 33 subindexes trading higher. The mining and oil sectors fell 1.63 percent and 1.55 percent, respectively.

Across the Korean Strait, the benchmark Kospi added 0.17 percent, trimming steeper gains seen in the morning.

Strength in the technology sector stateside carried over to the Asian trading day, buoying the broader index, with heavyweight Samsung Electronics rising 1.73 percent and chipmaker SK Hynix climbing 1.57 percent.

Over in Hong Kong, the Hang Seng Index advanced 1.17 percent amid broad-based gains, although energy-related names bucked the positive trend. The technology and heavily weighted financials sectors were among the best-performing, with Tencent last higher by 2.53 percent.

Gains were also seen on the mainland, with the Shanghai composite tracking higher by 0.91 percent and the Shenzhen composite edging up by 0.67 percent.

Elsewhere, the S&P/ASX 200 added 0.23 percent, as the 0.89 percent gain in the financials sector supported the index’s broader gains despite declines in energy and materials.

Oil prices declined on Tuesday following President Donald Trump’s Monday tweet that he would announce his decision on the Iran nuclear deal on Tuesday at 2 p.m. ET.

U.S. West Texas Intermediate crude futures declined 1.15 percent to trade at $69.92 per barrel, falling under the $70 level that it surpassed on Monday for the first time since end-2014. Brent crude futures, meanwhile, lost 0.95 percent to trade at $75.45.

The fall in prices was akin to buy the rumor, “sell the news kind of behavior” for markets, which had initially expected a statement from Trump only later in the week, Nicolas Sopel, a strategist at RHB Research Institute Singapore, told CNBC’s “Street Signs.”

Trump, who had been due to make a decision by May 12 on the agreement, has criticized the deal, taking issue with so-called “sunset clauses.” The 2015 accord has seen international sanctions on Iran lifted in exchange for the country curbing its nuclear program.

Oil had initially settled higher on Monday as markets weighed the potential impact of renewed U.S. sanctions.

“There’s much to play here. We’d reckon there’s still several dollars in the price based on a presumption the U.S. will pull out. So if Trump says he’s staying, we could swiftly see another $2 to $3 off crude prices,” Ray Attrill, head of foreign exchange strategy at National Australia Bank, said in a note.

Gains in the region tracked the firmer close on Wall Street on Monday, with technology shares recording a third consecutive day of gains. Still, U.S. stocks finished the day off their intraday highs on the back of Trump’s tweet.

In currencies, the dollar index, which tracks the dollar against a basket of currencies, firmed to trade at 92.828 at 12:10 p.m. HK/SIN after rising as high as 92.974 on Monday — its strongest level since December. Against the yen, the greenback traded at 109.05 after slipping as low as 108.84 earlier in the day.

The Australian dollar was softer on the back of weak retail sales data, with the currency slipping below the $0.75 handle and trading at $0.7494.

Source: CNBC