Asian stock indexes finished lower across the board Thursday, with the exception of the Shanghai Composite Index, as investors were spooked by the surprise contraction in U.S. manufacturingWednesday, and the impact of record oil prices on global growth.
U.S. light, sweet crude for February delivery briefly touched $100 per barrel on the New York Mercantile Exchange Wednesday for the first time as violence in Nigeria and weather-related production halts in Mexico raised concerns about supply. Crude prices were, however, easing in the Asian session.
The overnight rise in oil prices, coupled with a weaker dollar, sent investors rushing to gold. The precious metal surged to a fresh lifetime high overnight of $861.10 dollars per ounce but settled around $855 dollars in Asia.
Stocks like Lihir Gold, Newcrest Mining and Woodside Petroleum got a boost on the back of record commodity prices.
However, fuel cost-sensitive firms such as Korea Electric Power, SK Energy and Cathay Pacific Airways all tumbled.
Airline shares dragged both markets lower as China Eastern Airlines and Air China nose-dived on fears that China Eastern's efforts to sell a stake to Singapore Airlineswill not go through. According to market rumors, Air China or its parent may now make a counter offer.
South Korea's KOSPI closed flat at 1,852 while the Taiwan Weighted Index skidded 1.7 percent to end at 8,184.
The Hang Seng lost 2.4 percent, while the Straits Times Index closed 1.9 percent lower.
China's Shanghai Composite Index was the stand-out performer, ending 0.9 percent higher.
Australia's S&P/ASX 200 fell 1 percent as the major banks were in the red, led by Westpac Banking Corp which was down 47 cents or 1.7 percent at 27.59 Australian dollars.
Troubled shopping center owner Centro Properties Group bucked the downtrend, after the Australian Financial Review said U.S. investment firms Blackstone Group and Citadel Investment have sent teams to Australia to discuss taking a stake in the troubled firm.
Japanese financial markets were closed Thursday for the New Year's holidays. The Tokyo Stock Exchange reopens half-day on Friday, Jan. 4, and resumes full-day trading on Monday, Jan. 7.