Asia opens flat after OPEC extends output cut; Trump son-in-law Kushner under FBI scrutiny

Asia opens flat after OPEC extends output cut; Trump son-in-law Kushner under FBI scrutiny
PHOTO: AFP

Stocks in Asia were mixed at the open on Friday, after major oil producers agreed to extend output cuts for an additional nine months at an OPEC meeting in Vienna yesterday.

The production cuts of 1.8 million barrels a day, first agreed on in November last year, will now extend to March 2018.

The OPEC-led output cuts are targeted at rebalancing the global overhang in the oil markets which saw oil prices fall by more than half in recent years.

Oil prices fell by almost 5 per cent in the last session following the news as some investors had been hoping for deeper production cuts. US crude had traded above the $50 mark for most of the week in anticipation of the OPEC meeting.

Benchmark Brent crude traded flat at $51.46 a barrel while US crude was 0.02 per cent higher at $48.91.

"Oil was practically begging to be knocked off its perch after rallying into the OPEC meeting with wide expectations (for) extended cuts. As the extensions were estimated to be around nine to twelve months, OPEC needed to far exceed this time horizon for oil to sustain its rally," ThinkMarkets Senior Market Analyst Matt Simpson wrote in a Friday note.

Political developments in the US could also potentially rattle markets today after it was reported by NBC that Jared Kushner, the son-in-law and senior adviser of US President Donald Trump, was now under FBI scrutiny in its Russia probe.

The Nikkei 225 edged lower by 0.06 per cent while the Kospi added 0.07 per cent in early Friday trade.

The Kospi is trading at an all-time high and in its sixth consecutive session of gains.

Down Under, the S&P/ASX 200 dipped 0.1 per cent, driven by its materials sub-index which was 0.32 per cent lower.

Japanese conglomerate Toshiba announced KKR, SK Hynix, Broadcom and Hon Hai Precision had submitted bids for its memory chip unit. The company suggested it had received offers that were higher than 2 trillion yen ($17.9 billion), the Nikkei reported. Toshiba shares were down 2 per cent in early trade.

Meanwhile, the dollar strengthened against a basket of rival currencies to trade at 97.224, off lows of 96.880 seen earlier in the session. The dollar also gained against the yen to trade at 111.75.

The greenback had been on the defensive following the release of minutes from the US Federal Reserve's May meeting.

The Aussie dollar traded lower against the dollar after breaching the $0.75 handle yesterday. The Aussie traded at $0.7454 at 8:00 a.m. HK/SIN.

"Commodities will likely remain a key driver for the Australian dollar today," ANZ said in a note this morning.

In economic news, a host of data is expected today. Japan CPI for the month of April increased 0.4 per cent on year, in line with analyst forecasts.

Singapore industrial production is expected at 1:00 p.m. and Taiwan Q1 GDP is released at 4:00 p.m.

Stocks on Wall Street closed higher following strong gains in tech stocks, with the Nasdaq rising 0.69 per cent or 42.23 points to close at 6,205.26.

US markets will be closed for a long weekend due to Memorial Day next Monday.

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