Stocks edgy on Libya situation

Oil prices jumped more than $2 on Monday after Western forces struck targets in Libya.

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Hong Kong - Oil prices jumped more than $2 on Monday after Western forces struck targets in Libya, leaving stock markets shaky after suffering heavy losses lost week.

“I can see uncertainty and fear driving the price of oil higher in the short term,” said Matthew Lewis, an analyst at CMC Markets in Sydney.

Investors also remained cautious over the global economic impact of a massive earthquake and tsunami which devastated parts of Japan earlier this month, leading to radiation leaks at some nuclear power plants.

Workers are spraying water to cool overheating reactors at the Fukushima complex north of Tokyo but have not yet been able to restore power to large water pumps at the site.

The MSCI index of Asian shares outside of Japan edged up 0.2 percent as investors weighed the impact of higher oil prices on global growth and company profiles. Japanese markets were closed for a holiday.

The Nikkei plunged 10 percent last week as the nuclear crisis worsened, pulling shares in the rest of Asia down nearly 3 percent and weighing on markets in the United States and Europe, including riskier assets such as oil.

But Brent crude oil futures jumped around 2 percent to top $116 per barrel on Monday after Western warplanes and missiles hit Libya at the weekend in a bid to force leader Muammar Gaddafi to cease fire on rebels and end attacks on civilians.

Unrest in Syria and Yemen over the weekend also kept traders on edge.

In currency markets, the yen stabilised after surging by nearly 4 percent versus the dollar on Friday, riding on the back of the first G7 joint intervention in over a decade.

Some indications that further intervention may be needed to hold up the Japanese currency were evident with the dollar last trading at 80.85 yen, well below a level of 82.00 on Friday.

In China, interest rate swaps are set to rise while stocks and the yuan may advance after the central bank unexpectedly raised banks' reserve requirement ratios for the third time this year after markets had closed on Friday. - Reuters

Source: http://www.iol.co.za/stocks-edgy-on-libya-situation-1.1044684

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