Asia report: Stocks mixed as oil prices continue to boil

Stocks were mixed as they closed in Asia on Thursday, as oil prices continued to surge higher as the world watched Russia continue its assault on an invaded Ukraine.

In Japan, the Nikkei 225 was up 0.7% at 26,577.27, as the yen weakened 0.21% against the dollar to last trade at JPY 115.76.

It was a negative day for the benchmark’s major components, with robotics specialist Fanuc down 0.19%, Uniqlo owner Fast Retailing losing 1.15%, and technology giant SoftBank Group behind by 1.03%.

The broader Topix index was 1.18% firmer by the end of trading in Tokyo, closing at 1,881.80.

On the mainland, the Shanghai Composite was off 0.09% at 3,481.11, and the smaller, technology-heavy Shenzhen Composite lost 0.83% to 2,294.08.

Fresh data out of China showed the country’s services sector growing at a slower rate in February, with the unofficial Caixin/Markit services purchasing managers’ index coming in at 50.2 for the month.

That was down from 51.4 in January, but was still above the 50-point level that separates expansion from contraction.

“Regional PMIs show cost pressures were already rising on the eve of Russia's invasion of Ukraine,” said Craig Botham at Pantheon Macroeconomics.

“The behaviour of oil and other commodity prices signals further increases to come.

“We expect these cost increases to be passed on to consumers, amidst strong external demand.”

South Korea’s Kospi was ahead 1.61% at 2,747.08, while the Hang Seng Index in Hong Kong gained 0.55% to 22,467.34.

The blue-chip technology stocks were in the green in Seoul, with Samsung Electronics up 1.67%, and SK Hynix jumping 3.2%.

Oil prices were still strengthening as the region went to bed, with Brent crude last up 1.67% at $114.82 per barrel, and West Texas Intermediate ahead 2.26% at $113.10.

Neil Wilson at Markets.com described it as “one-way traffic” for oil as traders looked beyond Russia for barrels.

“Spreads between the front and back months are very wide, the backwardation pointing to extreme tightness in the market as traders search for anything but Russian crude.

“I talked this week about how higher civilian casualties would pressure the West into banning Russian oil and gas exports - they may not need to.

“Self-sanctions are already playing a big role - Shell, BP, Chevron all exiting, but traders and customers are swerving Russian oil without any sanctions needed.”

In Australia, the S&P/ASX 200 was up 0.49% at 7,151.40, and across the Tasman Sea, New Zealand’s S&P/NZX 50 rose 1.01% to 12,211.40.

The down under dollars were mixed against the greenback, with the Aussie last 0.07% stronger at AUD 1.3693, while the Kiwi weakened 0.14% to NZD 1.4753.