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Asian shares step back from 2007 peak, oil at three-year high

Reuters  |  TOKYO 

By Hideyuki Sano

TOKYO (Reuters) - Asian flinched from testing their 2007 record peak on Wednesday, as investors booked profits in high-tech while prices hit three-year highs due to production cuts and a fall in inventories.

European are expected to dip slightly with Germany's Dax futures down 0.2 percent and France's Cac futures and Britain's FTSE futures down 0.1 percent.

MSCI's broadest index of outside slipped 0.5 percent after six straight days of gains until Tuesday, that had taken it within a stone's throw from the record high touched in November 2007.

led the decline with a 1.4 percent fall as extended losses. The tech company's profit guidance disappointed investors and raised worries the memory chip boom may be coming to an end.

Japan's Nikkei also shed 0.3 percent, slipping from 26-year highs hit the day before.

"The rally has been a bit too fast. Investors are taking profits in high-flying hi-tech But the earnings and economic outlook in remains solid," said Yukino Yamada, at

Indeed, expectations of solid corporate profit growth helped

Wall Street's major indexes extend the New Year rally to record levels for a sixth day on Tuesday.

"U. S. fourth-quarter earnings are expected to rise more than 10 percent from the previous year. The market has been supported by the consensus that the goldilocks will continue while the Fed will raise interest rates only slowly," said Masahiro Ichikawa, at

Profits for companies are expected to rise 11.8 percent in the fourth quarter, compared with an 8-percent increase a year earlier, according to I/B/E/S.

Some investors said risk sentiment had been boosted by an apparent easing in tensions in the after North and agreed to future talks in their first official dialogue in more than two years.

welcomed what it said was a first step to solving the North Korean nuclear weapons crisis, even though said those were aimed only at the and not up for discussion with

In the currency market, the yen maintained the gains it made the previous day after the of trimmed the amount of its buying in long-dated bonds.

While the move was in line with the BOJ's subtle reduction in its bond buying over the past year, the so-called 'stealth tapering', the reaction highlighted how sensitive are to a pullback in Japan's massive stimulus.

"I don't think yesterday's operation is a hint of a policy change. But it highlighted the fact that unwinding of central stimulus will be a main theme this year.

We could see more moves like this," said a at a U. S.

The bond yield ticked up to 0.080 percent, the top of its range in the past several months.

The euro eased to $1.1945, compared to $1.2028 at the end of last week, due to profit-taking following the common currency's big gains late last year.

The BOJ's move also helped to raise the 10-year U. S. bond yield above its December high to 2.573 percent, the highest since March last year, from 2.482 percent late on Monday.

prices extended gains, with U. S. crude futures hitting a three-year high on a tight supply balance due to OPEC-led production cuts and a sharper fall in U. S. crude inventories.

The American Institute said late on Tuesday crude inventories fell by 11.2 million barrels in the week to Jan. 5 to 416.6 million, far bigger than analysts' expectations for a decrease of 3.9 million barrels.

U. S. Intermediate (WTI) crude traded at $63.49 a barrel, up 0.9 percent for the day, after having risen as high as $63.53 earlier.

Brent crude rose 0.6 percent to $69.22 per barrel, staying near its highest level since mid 2015.

Rising prices could fan inflation down the road, which could be detrimental to some countries that have been prone to high inflation.

Still, China's December prices grew at their slowest pace in 13 months as the government's stepped-up war against winter smog dented factory demand for raw materials.

The price index (PPI) in December rose 4.9 percent from a year earlier, compared with 5.8 percent in November, the (NBS) said on Wednesday.

(Editing by and Jacqueline Wong)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Wed, January 10 2018. 12:50 IST
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