April 17, 2024

Commodities Rise After Dramatic Losses

HONG KONG — The prices of oil, gold, silver and other raw materials rose in Asian trade on Friday, recouping some of the big losses suffered during a massive sell-off the previous day. But with investors now worried about the strength of the global economic recovery, stock markets performed less well, with declines of more than 1.8 percent in Japan and South Korea.

Expectations of greater demand as the global economy picks up speed, and the political and security concerns stemming from the unrest in the Middle East and Northern Africa, had produced steep rises in commodity prices earlier this year.

With both these drivers receding, at least for now, the rally came to a screeching halt on Thursday, with some commodities seeing record one-day losses in New York trading. Oil fell more than $9, below $100 a barrel for the first time in two months. Gold, which as recently as Tuesday was worth as much as $1,573 per ounce, slumped to as low as $1,462 on Thursday. And silver fell 8 percent, taking its total decline since the end of last month to more than 25 percent.

On Friday, many raw materials clawed back some of those losses. Gold rose to about $1,489 an ounce, a gain of 1 percent; silver climbed more than 2 percent to trade at around $35.50 by late morning in Asia.

The price of a barrel of oil rose to $100.50.

Asian stocks, meanwhile, fell. In Japan, which had been closed for the past three days for a public holiday, the Nikkei 225 index dropped 1.8 percent by the lunchtime break in Tokyo. In South Korea, the Kospi index fell more than 2 percent by late morning.

The Taiex index in Taiwan and the Straits Times index in Singapore both slipped 0.4 percent. In Hong Kong, the Hang Seng fell 0.7 percent, and in mainland China, the Shanghai composite declined 0.5 percent.

Airline stocks mostly bucked the overall declines, buoyed by the fact that lower global oil prices could help reduce worryingly high fuel bills in the industry.

Qantas, the Australian carrier, rose 3.8 percent, Cathay Pacific gained 3.1 percent, Korean Air Lines rallied 2.3 percent.

Article source: http://www.nytimes.com/2011/05/07/business/global/07markets.html?partner=rss&emc=rss

Speak Your Mind