Asian markets traded mostly lower Wednesday, with losses in energy plays amid fresh oil-price declines counterbalanced by gains in Japan shares as traders hoped for more stimulus from the central bank.
Traders around the region were likelyhesitant ahead of the U.S. Federal Reserve meeting set to end on Thursday. Markets have been jumpy in recent months, awaiting the Fed's first interest rate hike in nine years. While most analysts don't expect that hike to come at this meeting, they'll be parsing the Fed's statement for cues on when it will move.
Oil shares around the region lost ground after crude oil futures settled at a two-month low of $43.20 a barrel, down 78 cents, in U.S. trade overnight. In Asia trade midday, WTI edged up 7 cents to $43.27. Japan's Inpex shed 0.4 percent. In Hong Kong, CNOOC shed 1.95 percent and Sinopec fell 1.4 percent.
Jeff Powell, chief investment officer at Polaris Greystone Financial, blamed much of oil's decline on OPEC's failure to cut production.
"You've also seen a lot of efficiencies created as oil has dropped within the fracking segment of the U.S. market, so a lot of the production that's going on in the U.S. really hasn't slowed down even though you have seen this material drop in oil price," Powell told CNBC.
However, he said that it was possible oil prices were bottoming, noting that he was "dabbling" in energy shares.
Amid the declines in resources plays, the S&P ASX 200 index ended down 0.2 percent, retracing some early losses after benign inflation data raised the possibility the Reserve Bank of Australia may cut interest rates at its meeting next week. Third-quarter consumer prices rose 0.3 percent, less than the Reuters forecast for a 0.5 percent rise. That decked the Australian dollar, which fell as low as $0.7116 after the data from around $0.7192 before the data.
Japan shares ended higher, with the Nikkei index tacking on 0.67 percent.
Traders there are likely to be hesitant as they await the outcome of the Bank of Japan's meeting at the end of the week. Many analysts expect the central bank to introduce further stimulus, which is likely to boost asset prices.