Asian stocks hung on low sentiment on Wednesday after two sessions of sharp gains.
US crude futures jumped 5.4% to $24.92 a barrel, having shed 9.4% the session before, while Brent crude added 74 cents to $32.61.
MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.5 per cent.
Japan’s Nikkei dropped 0.7 per cent and South Korea 0.8 per cent. E-Mini futures for the S&P 500 shed early gains to turn 0.7 per cent lower as investors took profits on the recent spike.
According to JP Morgan, “Data shows the recent move higher has been accompanied by short covering and de-risking rather than active risk taking on the long side.”
The S&P 500 had ended Tuesday down 0.16 per cent, having been up as much as 3.5 per cent at one stage. The Nasdaq dropped 0.33 per cent and the Dow 0.12 per cent.
Ratings agency S&P Global on Wednesday warned the cost of combating the virus would weigh heavily on Australia’s finances and changed the outlook for the country’s rating to negative.
That knocked the Aussie dollar down 0.6 per cent to $0.6191 and hit risk sentiment generally. The US dollar eased 0.1 per cent on the safe-haven yen to 108.60, while the euro dipped to $1.0877.
Against a basket of currencies, the dollar edged up 0.1 per cent to 100.070 while gold eased back to $1,644, after touching a 3-1/2-week high on Tuesday at $1,671.