Economy
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Equities And FX: Resilient Despite High Oil
April 2006 | Market StrategySorry, you must be a subscriber to view this article in full. If you are a subscriber please login.
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Despite oil prices reaching new record highs, Asian equities and currencies have gone from strength to strength, underscoring their fundamental resilience. In theory, we would expect Asian assets to be suffering from US$70.00/bbl oil, owing to the fact that most countries in the region import the vast majority of their crude requirements. In turn, higher oil prices undermine economic growth and boost inflation. However, a combination of still-positive global macroeconomic factors, low inflation, and country-specific issues are maintaining investor interest in stocks and currencies. Consequently, Indonesia's JKSE has reached a record high of 1,417.38, while India's Sensex (11,828.66) and South