Asian stocks trimmed losses Thursday as oil prices edged up from an over three-month low, although the mood remained cautious ahead of key economic events overseas.
The U.K. made its first air strikes on Syria against the so-called Islamic State after its parliament approved measures for greater British involvement in the ongoing conflict in the Middle East. Elsewhere, it is widely expected that the European Central Bank (ECB) will announce further stimulus to the euro zone.
U.S. crude futures clawed back over the $40 mark during Asian trading hours, up 43 cents or 1.08 percent to $41 a barrel. The internationally traded Brent saw a 80 cent or 1.9 percent gain to $43 a barrel.
Investors will look to Vienna on Friday, where members of the Organization of Petroleum Exporting Countries (OPEC) will meet to decide on oil production policies.
But Angus Nicholson, market analyst at spreadbetter IG, said in a note there was very little expectation the OPEC countries would reach any constructive outcome. OPEC, led by Saudi Arabia, has pursued a strategy of defending its market share by pumping out more oil even in the face of global oversupply, in the hope of forcing down the price to a point that higher-cost shale rivals halt output.
According to the International Energy Agency, world oil stockpiles are currently at a record high.
"Saudi Arabia, Iraq and Russia are still producing oil at record rates and there is little hope that this meeting will convince them to cut back, particularly given that Russia is not a member of OPEC so would need to be dealt with separately," Nicholson wrote.
The U.K. made its first air strikes on Syria against the so-called Islamic State after its parliament approved measures for greater British involvement in the ongoing conflict in the Middle East.
The stood out among Asian equities and closed firmly in positive territory, up 49 points or 1.37 percent at 3,585, as investors digested existing market conditions
Speculation of additional stimulus from Beijing to prop up China's slowing property market sent property and banking and finance shares soaring in late afternoon trade on Tuesday.
A survey released this morning showed a cooling in China's services sector. The Caixin Purchasing Managers Index (PMI), a closely-watched gauge of nationwide business activity that focuses on smaller and medium-sized companies, dropped to 51.2 in November from 52 the month before. The official services PMI, which was out on Tuesday, showed an uptick to 53.6 from 53.1 in October. A reading above 50 implies growth.
The Shenzhen Composite closed 2.5 percent higher; the Chinext was up 3.5 percent and the CSI 300 Index was up 0.73 percent.
Finance stocks traded mixed, with shares in Huatai Security seeing gains of 3 percent. Brokerages are still under investigation by Chinese regulators for short-selling and speculation in the lead-up to China's mid-year market rout.
Banks also closed firmly in the green, with gains over 3 percent while Chinese properties also saw some gains in share prices. Vanke closed 5 percent up and China Merchant 6.6 percent higher.
Chinese energy stocks were back up in positive territory as oil prices rose.
The pared losses and closed flat, up 2 points or 0.01 percent to 19,940 as investors remained cautious over Japan's fragile economy.
Reuters reported that capital flows data showed foreign investors were net sellers of Japanese stocks last week, with a net 54.6 billion yen ($443 million) in shares sold.
On Wednesday, the Bank of Japan's deputy governor Kikuo Iwata told business leaders in Okayama the BOJ was prepared to ease monetary policy again if tougher conditions in emerging markets stymied the uptrend in Japanese inflation, but he said that the central bank could keep policy unchanged at present because the risks from a further slowdown in emerging economies worsening was low in the near future.
"If the manifestation of such risk leads to a deterioration of the underlying trend in inflation, the Bank will make adjustments without hesitation," he said.
Shares in Pioneer saw the biggest loss on the index, down 4 percent on fears of stock dilution. The company reportedly announced on Wednesday it will raise 15 billion yen ($121.6 million) by issuing convertible bonds.
Japanese blue chip companies closed mixed with shares in Mitsubishi Electric and Toshiba seeing losses between 0.7 and 1 percent. Market heavyweight Fast Retailing also closed the session down 1.57 percent.
The South Korean market continued its losing run as investor confidence weighed by Wall Street and lower commodities prices. The Kospi index closed 15 points or 0.8 percent lower at 1994.
Revised data from the Bank of Korea showed the economy grew a seasonally adjusted 1.3 percent on-quarter between July and September.
The Korean won depreciated against the dollar, fetching 1164 won.
Australian market closed down, weighed by lower commodities prices. The main ASX 200 index was down 23 points or 0.44 percent at 5,235.
Gold miners closed mixed after spot gold fell 1.5 percent to $1,052 an ounce overnight. Fed chair Janet Yellen again hinted at an imminent rate hike when the Federal Open Market Committee meets again in mid-December.
Banking stocks ended mostly in negative territory as investors took cues from a poor finish in Wall Street.
Overnight in the U.S., government data showed a tenth straight week of inventory build-up stateside, adding to worries over a supply glut.
The Fed also released its Beige Book, a report on business activities around the country, that noted a modest tightening in the labor market.
Investors were wary as they watched another mass shooting unfold, this time in San Bernardino, California, where gunmen opened fire at a social services agency, killing at least 14 people before fleeing.
The closed 159 points or 0.89 percent lower at 17,730; the S&P 500 was down 23 points or 1.1 percent at 2,080; and the closed 33 points or 0.64 percent lower at 5,123.