Stocks open broadly lower, but energy sector gains with oil

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SINGAPORE (AP) — Asian stocks were mixed on Tuesday while oil prices soared to their highest level since October after the U.S. said it would soon impose sanctions on all buyers of Iranian oil.

Japan’s Nikkei 225 index lost 0.2% to 22,165.41. The Kospi in South Korea was less than 0.1% higher at 2,217.31 while the Shanghai Composite gave up 0.6% to 3,194.88. Hong Kong’s Hang Seng lost 0.1% to 29,926.69. Australia’s S&P ASX 200 gained 0.8% to 6,308.50.

Shares fell in Taiwan and Singapore but rose in Indonesia.

There was no strong impetus for buying in Asia. Reports from a recent high-level meeting in China, which was chaired by President Xi Jinping, showed willingness to fine-tune monetary policy but raised questions about future government stimulus. Traders were waiting for a slew of U.S. earnings reports from big companies such as Twitter starting Tuesday.

Over on Wall Street, the spike in crude oil prices boosted energy stocks on an otherwise listless Monday.

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The broad S&P 500 was up 0.1% at 2,907.97 while the Dow Jones Industrial Average fell 0.2% to 26,511.05. The Nasdaq composite picked up 0.2% to 8,015.27. The Russell 2000 index of smaller company stocks shed 0.4% to 1,560.04.

On Monday, the Trump administration said it would no longer exempt any countries from U.S. sanctions if they continue to buy Iranian oil. The administration had granted eight waivers when it reimposed sanctions on Iran in November. These expire May 2.

Asian countries, namely China, India, Japan and South Korea are major importers of Iranian oil. The move will choke off more than $50 billion of annual Iranian income, which the U.S. says funds destabilizing activity in the Middle East and beyond.

“The prompt contracts quickly repriced higher on panic fears that markets could face an immediate supply crunch, adding more pressure to the already tenuous global supply squeeze,” Stephen Innes of SPI Asset Management said in a commentary.

Industry experts said the sanctions could potentially remove up to 1.2 million barrels of oil per day from international markets. But that number will likely be lower, depending on how countries respond and just how much oil Iran continues to export.

ENERGY: Oil prices rose for the third straight day on the news. Benchmark U.S. crude added 34 cents to $65.89 per barrel in electronic trading on the New York Mercantile Exchange. The contract surged $1.48 to $65.55 per barrel on Monday. Brent crude, used to price international oils, gained 29 cents to $74.33 per barrel in London. It jumped $2.07 to $74.04 per barrel in the previous session.

CURRENCIES: The dollar weakened to 111.80 yen from 111.93 yen late Monday. The euro fell to $1.1253 from $1.1257.

The Western Journal has not reviewed this Associated Press story prior to publication. Therefore, it may contain editorial bias or may in some other way not meet our normal editorial standards. It is provided to our readers as a service from The Western Journal.

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