SYDNEY (Reuters) - Oil prices hit
the skids on Monday after Iran and six world powers sealed a deal
curbing its nuclear program, a fillip for global economic growth that
found expression in heartier share prices from Tokyo to Seoul.
The agreement gives Iran some relief from crippling sanctions and is
considered a big step toward a more lasting treaty. While Iran will not
be allowed to increase its oil sales for six months, any easing of
Middle East tensions tends to lead to lower crude prices.Brent crude oil shed $2.47 to $108.58 a barrel, its biggest daily drop in a month. U.S. oil lost 88 cents to $93.96 a barrel. (O/R)
If sustained, the drop would be a net plus for spending power globally given high petrol prices essentially act like a tax on consumers.
"Positive growth signals continue to trickle out across the global economy and there is growth convergence between developed and developing economies," said Peter Dragicevich, a strategist at CBA.
"Our world GDP "nowcasting" estimate points to accelerating global economic growth in the final months of 2013. This is the general trend we expect to occur in early 2014."
Attention in Asia was again on Japanese markets as a sliding yen promises to boost exports and profits. The Nikkei (NIK:^9452) sped ahead by 1.3 percent, having gained almost 11 percent in little more than two weeks.
On Wall Street, the Dow (.DJI) ended Friday with gains of 0.3 percent, while the S&P 500 (.SPX) added 0.5 percent for its first ever close above 1,800. Early Monday, S&P 500 futures had added another 0.3 percent.
But with money flooding into developed world assets, emerging markets are getting cold-shouldered. It was notable that MSCI's broadest index of Asia-Pacific shares outside Japan failed to make any headway at all last week, even as Wall Street made new peaks.
So far on Monday, the index was up 0.4 percent, as Seoul shares led the way with an increase of 0.7 percent (.KS11).
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