Oil’s tumble to a four-year low has turned airlines and crude-importing nations into the stock market’s biggest winners while sending energy companies to the lowest levels since 2009.
Air France-KLM Group rose 4.8 per cent and Deutsche Lufthansa AG gained 4.2 per cent, leading an index of European travel shares to its highest level in more than seven years. In Asia, Cathay Pacific Airways Ltd. capped its largest advance in more than two years.
“It’s all about the oil price,” said David Cassidy, a Sydney-based equity strategist at UBS AG.
Crude tumbled after the Organization of Petroleum Exporting Countries kept its production ceiling steady at Thursday's meeting in Vienna, resisting calls from Venezuela to cut output. The collapse in prices is dictating winners and losers across national stock markets, with benchmark indexes in oil importers such as China and India rising more than 1 per cent today, while those in exporters including Malaysia fell.
Air carriers and shippers accounted for seven of the 10 biggest gains on the MSCI Asia Pacific Index as of 4:23 p.m. in Hong Kong, while energy producers made up six of the 10 steepest drops.
The transport sector in China, the world’s largest oil importer, will benefit most as a 1 per cent drop in crude equates to $2.2 billion in savings and boosts profit by 0.2 per cent, Citigroup Inc. said in a report.
China Shipping Container Lines Co. jumped 6.1 per cent on Friday while Air China Ltd. added 6.4 per cent, set for the biggest increase in a year.
“Oil is the key driver for the markets today,” Ryan Huang, a strategist at IG Ltd. in Singapore, said by phone. “Cheaper oil prices will be good for the economy in the long run.”
Bloomberg News, edited by Hospitality Ireland