Asian stocks opened mixed on Tuesday, pressured by oil prices that plummeted on Monday. Oil prices slumped over 4 percent on Monday after Washington hinted that it may issue exclusions to its sanctions on Iranian oil. Libyan ports also reopened on Monday, bringing prices downward as traders worried about increasing supply by both Russia and other oil producers. The fall of oil prices was steep, but hardly surprising to many analysts who were expecting a decline after such a sharp upswing of prices in recent weeks.
Brent crude futures hit a low of $71.52 per barrel on Monday but were up 0.68 percent as of 10:16 a.m. on Tuesday morning in Asia, to $72.33. U.S. WTI futures were also up on Tuesday morning, with a more modest gain of 0.07 percent, to $68.11 per barrel.
Stock markets were shaken by the oil movements, with U.S. oil stocks taking a beating on Monday, creating momentum into Tuesday Asian trading session. Chevron closed 0.85 percent lower and Exxon Mobil closed 0.98 percent lower on Monday, tugging the Dow Jones Industrial Average, though it managed to eke out gains for the day. The S&P 500 and the NASDAQ both closed lower on Monday.
In Asia, Hong Kong’s Hang Seng Index dropped 0.91 percent in the first hour of trading and the Shanghai Composite fell 0.92 percent. South Korea’s Kospi saw a 0.18 percent setback and Australia’s ASX 200 was 0.40 percent lower. Only Japan’s i 225 saw gains in the early morning, trading up 0.47 percent.
Federal Reserve Chair Jerome Powell will testify about the economy and monetary policy before the U.S. Senate Banking Committee on Tuesday, and he will address the House of Representatives Financial Services Committee on Wednesday. Traders are eager to hear his thoughts, and he is largely expected to reconfirm the Fed’s commitment to gradual monetary policy tightening.