Asian Markets End Mixed as Oil Declines
Asian markets were mixed Wednesday as oil prices held below $110 and the U.S. dollar neared a 10-½ month high, raising hopes of an easier business environment for manufacturers and exporters, but rattling resource-focused stocks.
Oil prices as fears receded that Hurricane Gustav would disrupt Gulf of Mexico oil production, and U.S. growth worries continued to nag. But dealers expected volatility in commodity prices after a big U.S. hedge fund, Ospraie Asset Management, announced it was shutting its flagship commodities product after steep losses.
The weaker oil price helped keep the dollar within sight of a 10-1/2-month high against a basket of major currencies as the weakness in other major economies continued to give a relative edge to the U.S. currency.
Japan's Nikkei 225 Average snapped a two-day losing streak, edging up 0.6 percent after a sharp fall in oil eased fears about inflation and helped Honda Motor and other exporters rise. But gains were based mainly on bargain-hunting and ran out of steam in late trade, with resource shares such as oil and gas field developer Inpex Holdings taking a beating and keeping overall rises limited.
Seoul shares gained 1.4 percent after their steep falls on the week led by tech firms and automakers, while some conglomerate shares that had tumbled on liquidity concerns also made a recovery.
Australian shares fell 1.1 percent, hit by hefty losses in late trade in resource stocks on weaker oil and metals prices, though banks extended the previous day's gains. Rio Tinto dropped over 6 percent while BHP Billiton and Woodside Petroleum both lost 3 percent.
Hong Kong shares extended losses to fall 2.2 percent, with commodity-linked stocks hit hard as oil prices spiral lower and shipping stocks tracking losses in the global freight index. Bucking the broad market blues, China Huiyuan Juice soared on news of a $2.5 billion takeover bid by Coca-Cola. Shares in the juice maker rallied 164.3 percent, but were still lower than the HK$12.2 per share the U.S. beverage giant has agreed to pay.
China's Shanghai Composite Index was down 1.2 percent, following Hong Kong's lead with banks such as China Merchants falling.
Singapore's Straits Times Index shed 1.4 percent. Shares of commodities firms took a beating, reacting to a fall in oil prices after Hurricane Gustav's impact on the U.S. oil industry was seen limited. Shares of Noble Group and Olam International dropped sharply. Palm oil processor Wilmar International, fared slightly better than its peers, losing just a bit.