Nikkei flat as falling oil prices drag on energy shares

Published: May 28, 2018 12:43:43 | Updated: May 29, 2018 12:48:06

Japanese shares were little changed on Thursday on Monday as a further slide in oil prices pulled down energy-related stocks, offsetting renewed hopes of a US-North Korea summit next month.

The benchmark Nikkei share average was nearly flat at 22,445.27 points by the mid-morning break, erasing gains of 0.4 per cent earlier in the session.

The broader Topix slipped 0.2 per cent to 1,768.21, with the JPX-Nikkei Index 400 edged down 0.1 per cent to 15,641.00, reports Reuters.

As oil prices extended their sharp declines on Monday, oil refinery and exploration companies were hit hard, with Inpex, Japex and JXTG all shedding between 3.6 and 4.2 per cent each.

But lower fuel prices benefitted the air transportation sector index, which advanced 1.7 per cent.

Although the Nikkei had opened higher on optimism that the historic summit meeting between United States and North Korea may be back on track, most investors were cautious and kept to the sidelines.

US President Donald Trump said on Sunday a US team had arrived in North Korea to prepare for a proposed summit between him and North Korean leader Kim Jong Un, which Trump pulled out of last week before reconsidering.

Developments in Italy were also giving investors pause.

While the country’s president rejected a eurosceptic pick for the key economy ministry, his decision led to a collapse in efforts to form a coalition government, triggering a possible constitutional crisis and opening the prospect of fresh elections.