TOKYO Nov 26 Oil prices stabilised on Tuesday
after the previous session's slide as traders questioned how
quickly the Iranian nuclear accord could translate into higher
supplies, while Asian shares got off to a cautious start.
The yen regained some poise following Monday's steep decline
to a six-month low against the dollar and a four-year trough
versus the euro.
U.S. crude prices added 0.2 percent to above $94 a
barrel, pausing after the previous session's 0.8 percent decline
following a weekend deal between the West and Tehran to halt
Iran's most sensitive nuclear activities in exchange for some
relief from crippling sanctions.
"The interim six-month 'freeze' agreement just reached on
Iran's nuclear programme should not have any impact on oil
prices, aside from short-term sentiment, because core sanctions
on oil and banking have not been touched," Societe Generale said
in a note.
"We see a greater than 50 percent chance that a
comprehensive agreement will be successfully reached within six
months....If and when that happens, it could take Iran three to
nine months to recover the one million barrels per day in
production lost since 2011."
MSCI's broadest index of Asia-Pacific shares outside Japan
inched up 0.1 percent, adding to a 0.3 percent
rise in the previous session on the back of the Iranian deal.
Thai assets looked set to come under further pressure on
heightened political uncertainty as anti-government protesters
forced their way inside the country's Finance Ministry and burst
through the gates of the Foreign Ministry compound, in a bid to
oust Prime Minister Yingluck Shinawatra.
On Monday, the Thai SET index fell for a fifth
straight session to an 11-week closing low and the baht
tumbled to a two-week low versus the dollar.
Citigroup said the Iranian nuclear deal could be a
"get-out-of-jail-free card" for current account deficit
countries, such as India, Indonesia and Turkey, which face a
liquidity drain when the Federal Reserve eventually tapers in
the coming months.
Tokyo's Nikkei share average was likely to take a
breather, with futures pointing to a weaker open after it
climbed 1.5 percent on Monday to within sight of a 5-1/2 year
peak reached in May.
The Japanese currency, which typically falls when share
price rise, was up 0.2 percent at 101.52 yen to the dollar
and up 0.1 percent at 137.27 to the euro.
The euro was little changed at $1.35195, having
fallen 0.3 percent overnight.
"We remain bullish on the dollar heading into 2014 but
remain tactically cautious on establishing longs, with a number
of U.S. dollar pairs already trading at the high end of their
ranges and data unlikely to be consistent enough to support
expectations for an early tapering," analysts at BNP Paribas
wrote in a note.
Data showed on Monday that contracts to buy previously owned
U.S. homes fell for a fifth straight month in October, hitting a
10-month low and adding to signs of cooling in the housing
U.S. stocks ended mixed overnight, with the Dow Jones
industrial average posting a slim gain to end at another
record high, while the S&P 500 eased 0.1 percent.