Libya Revolution Impact on Global Recovery

Posted on February 22, 2011

News from Asia this morning 22 February 2011:

Asian stocks fell, sending the regional benchmark index to its biggest decline in a month, as concern mounted that instability in the Middle East and North Africa may derail a global recovery.

Hyundai Engineering & Construction Co., which gets 38 percent of sales from the Middle East, slumped 9.7 percent in Seoul. Chiyoda Corp., a plant-engineering company that gets almost half of its income from the Middle East, sank 4.4 percent in Tokyo. Air China Ltd. and Singapore Airlines Ltd. dropped at least 2.4 percent as crude oil futures soared to their highest in more than two years in London, curbing the earnings outlook for the world’s biggest airlines.

“The big risk for the world is oil prices,” Arjuna Mahendran, Singapore-based head of investment strategy for Asia at HSBC Private Bank, said on Bloomberg Television. “If oil prices hit $120 a barrel in the next three months, that’s effectively a tax on U.S. consumers. That could slow down the phase of recovery that we’ve seen since last year.” [Bloomberg]

Posted in: ECONOMY