Asian stocks trim losses after China trade, but oil drop weighs

Asian shares were mixed on Tuesday, as traders weighed a better-than-expected trade report from the mainland and the continued fall in global oil markets.

U.S. stocks lost ground on Monday, extending a two-week decline, as worries about falling oil prices took hold before the start of quarterly earnings.

Oil prices slumped more than 5 percent overnight, extending the second-deepest rout on record, after Goldman Sachs slashed its short-term price forecasts and Gulf producers showed no sign of curbing output. U.S. crude settled down $2.29 at $46.07, its lowest settlement since April 2009. Brent crude was last down about $3 to $47.24 a barrel, after dropping as low as $47.18, its lowest level since March 2009.

As a result, the Dow Jones Industrial Average ended down 0.5 percent, while the S&P 500 shed 0.8 percent, with the energy sector leading declines. The tech-heavy Nasdaq declined 0.8 percent. Meanwhile, the CBOE Volatility Index, a measure of investor uncertainty, jumped nearly 12 percent to 19.60.

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Mainland indices up

It was another day of choppy trading for China's Shanghai Composite index, which inched up a modest 0.2 percent after December trade figures suggested that the world's second-largest economy ended the year on a more solid footing. The blue-chip CSI 300 index closed flat.

"It is not a huge surprise that China is heavily reliant on exports as a growth driver at the moment as domestic demand remains fragile. What this means is, while China can maintain steady terms of trade, it'll still need to work on stimulating domestic demand to keep growth ticking along," said Stan Shamu, IG market strategist.

Among the most active stocks, the Agricultural Bank of China traded 0.3 percent lower while Bank of China lost 0.7 percent. Brokerages were also downbeat, with Citic Securities and Haitong Securities pulling back 4 percent each. Founder Securities fell 1.7 percent.

In Hong Kong, the Hang Seng index gained momentum to notch up 0.8 percent. Meanwhile, the yuan edged up against the greenback to fetch 6.2015 late Tuesday.

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Nikkei skids 0.6%

Japan's benchmark Nikkei 225 index halved losses in the final hour of trade, allowing the stock index to rebound from a near one-week low on Tuesday. In the previous session, Japanese markets were shut for a holiday.

Positive data showing the country's current account recording a healthy surplus failed to lift sentiment earlier. According to government figures released before trade opening, Japan's current account posted a surplus for the fifth straight month in November, lifted by a rise in income from overseas investment on the back of a soft yen.

The local currency gained 0.4 percent against the greenback to trade at a three-and-a-half-week high of 117.8, which weighed on exporter stocks. Sony, Toshiba and Toyota Motor made losses between 3 to 1.2 percent.

Retailers also struggled on Tuesday following profit warnings. Aeon pulled back nearly 6 percent after it reported a 48 percent plunge in operating profit during the March-November period from a year earlier. Seven & i Holdings sagged over 3 percent following a worse than expected profit for the same period.

Japan Airlines, which was seen to benefit from lower fuel prices, bucked the downtrend to scale up 0.7 percent Tuesday.

ASX loses 0.3%

Australia's key S&P ASX 200 index declined for a second straight session on Tuesday, but managed to trim losses in the afternoon as an improving trade picture in the mainland offset negative impact from the relentless slide in oil prices.

The hardest hit on the local bourse were energy producers; Oil Search lost nearly 3 percent, while Santos and Woodside Petroleum threw away 1.1 and 1.7 percent each. Miners also traded Tuesday on the back foot, after iron ore prices dropped to $68.50 a tonne, with junior miners being the main targets of selling. Atlas Iron and Mount Gibson closed down more than 11 percent each.

Rio Tinto, which said that it expects to start uranium exports to India by 2017, fell 1.8 percent. Alumina outperformed the bourse on news that its joint venture partner Alcoa beats fourth quarter earnings. Shares of the resource company climbed more than 4 percent.

Meanwhile, the Australian dollar pared early gains to fetch $0.8155 per U.S. dollar late Tuesday.

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Kospi slips 0.2%

South Korean shares closed down modestly on Tuesday, with energy-related plays leading declines. Oil refiner SK Innovation and the country's largest chemical company LG Chemical receded 2.4 and 0.3 percent each, while blue-chip Kepco settled more than 2 percent lower.

Hyundai Glovis plummeted by the daily bourse limit of 15 percent after reports of a failed $1.25 billion stake sale in the logistics affiliate Hyundai Motor. Shares of the latter rose 1.1 percent on Tuesday.

Meanwhile, the South Korean won backed down from Monday's three-and-a-half-week high to fetch 1,082 against the greenback.

CIMB in focus

In Malaysia, shares of CIMB Group rose over 14 percent after local media reported that plans to merge the bank with two smaller lenders were called off. The merger with RHB Capital and Malaysia Building Society was expected to create a banking group with assets of about $190 billion.

Shares of RHB Capital advanced 0.9 percent while Malaysia Building Society dropped nearly 6 percent on the news, amid a 0.8 percent rise in the broader FTSE Bursa Malaysia KLCI index.