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Asian markets close mostly down, ASX at 2-year low

Yoshikazu Tsuno | AFP | Getty Images

Asian markets closed mostly down after selling off on Monday, with some energy stocks seeing a rebound after oil prices rose in the U.S. session.

U.S. markets finished in the green. The Dow Jones Industrial Average was up 103 points, or 0.6 percent, at 17,369. The S&P 500 was up 9.6 points, or 0.48 percent, at 2,022 while the Nasdaq closed up 19 points, or 0.38 percent, at 4,952.

On the data front, China will release November foreign direct investment (FDI) numbers.

Moody's Analytics predicted $10 billion in FDI for November, flat on-year. The firm said China's slowing economy was reducing incentives for foreign investors - in October, after Beijing cut interest rates, there was a large capital outflow for the month.

"Lower interest rates and a weaker yuan are reducing the returns to capital in China," Moody's said.

Energy stocks mixed in Asia

Symbol
Name
Price
 
Change
%Change
NIKKEI
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HSI
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ASX 200
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SHANGHAI
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KOSPI
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CNBC 100
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Asian energy plays were trading mixed after oil prices got some respite in overnight trade, even though oversupply concerns remain.

In Asian trade, U.S. crude futures were down 8 cents, or 0.22 percent, at $36.23 a barrel. The internationally traded Brent was down 7 cents, or 0.18 percent, at $37.85 a barrel.

In Australia, oil producers closed mixed with shares in Oil Search up 1.37 percent, Woodside Petroleum down 0.8 percent, and Santos down 1.8 percent.

Oil Search announced that it has signed two power purchase agreements with state-owned PNG Power which, the company said, is expected to create over 500 permanent full time jobs in the local area. Reports said the project aims to provide up to 100 MV of additional electricity generating capacity.

Japan's Inpex closed down 1.05 percent while Japan Petroleum was down 1.55 percent.

South Korean oil refineries traded lower shares in S-Oil were down 1.24 percent, SK Innovation down 0.41 percent, and GS Holdings down 0.6 percent.

In the Chinese market, CNOOC was up 2.3 percent, PetroChina up 1.39 percent, and Sinopec up 1.38 percent.

According to reports, CNOOC and Royal Dutch Shell agreed to double the capacity in their jointly-owned ethylene plant in Guangdong province.

Chinese markets lose momentum

The Chinese market fell into negative territory again in the afternoon, with the Shanghai Composite closing down 10 points, or 0.28 percent, at 3,510. The smaller Shenzhen Composite was up 25 points, or 1.1 percent, at 2,264.

Shares in property stocks closed up between 1.32 and 4.98 percent while financial plays saw a fair bit of sell-off in the afternoon.

Brokerages were down between 2.68 and 3.7 percent while banking stocks were down between 0.86 and 1.5. Citic Securities, down 3.7 percent, announced that it has halted plans for a corporate bond issue to raise capital, according to Reuters, citing domestic Chinese media. Citic Securities declined to comment on this issue.

Before trading began, the People's Bank of China (PBOC) once again set the midpoint for the yuan at fresh four and a half year low at 6.4559 per dollar, 0.1 percent weaker than the previous fix of 6.4495. The yuan is then allowed to trade within a range of 2 percent above or below the official fixing rate.

The Yuan traded lower against the dollar at 6.465.

Some analysts believe ahead of the Fed's move later this week, there's some worry in Beijing about liquidity.

Speaking to CNBC's "Asia Squawk Box", Andrew Collier, managing director at Orient Capital Research said, "I think they're very nervous because we are seeing the end of a very long period of liquidity loosening period. And now the Chinese have to react to that. And they're going to have to start buying the yuan, which is going to withdraw some of the liquidity from the country."

Japan, South Korea close mixed

The Nikkei 225 index saw a brief uptick at market open before falling back firmly into negative territory, closing down 317 points, or 1.68 percent, at 18,566 after hitting a near six-year low on Monday.

Export stocks such as Toyota, Nissan, Honda, and Sony all closed down between 1.86 and 3.64 percent while index heavyweight Fast Retailing trimmed morning gains and closed 1.21 percent lower.

Toshiba shares lost early gains to finish flat after a report from Nikkei business daily said the company plans to cut up to 7,000 jobs in its lifestyle business, which includes consumer appliances. Toshiba responded to the reports and said it was considering various options for restructuring and that the Nikkei report was not based on any company announcements.

The Japanese yen traded higher at 120.78 against the dollar.

In South Korea, the Seoul Kospi saw modest gains in the afternoon session to close 5.15 points, or 0.27 percent, up at 1,933.

Shares in blue chip companies were mostly in positive territory. Samsung Electronics was up 1.27 percent, Hyundai Motor up 0.66 percent. LG Electronics was up 4.38 percent.

ASX 200 falls to 2-year low

The Australian market closed in the red, with the ASX 200 down 19 points, or 0.39 percent, at 4,909.6 - the lowest since July 2013.

Chris Weston, chief market strategist at spreadbetter IG, said in a note, "Traders faded the rally in the ASX 200 from an intra-day high of 4969 and this again shows that market players just aren't happy to bid up the market, especially with the madness likely to be seen on Thursday morning (AEDT)," referring to the impending Fed decision.

He added that while it is likely that traders want to buy risk assets once more, there's lingering concern over "being long in a market where traders genuinely inherit a belief of a policy mistake from the Federal Reserve."

Shares in four of Australia's largest banks - ANZ, Commonwealth Bank of Australia, Westpac, and NAB - closed down between 0.2 and 1.36 percent.

Earlier, the Reserve Bank of Australia (RBA) released its December meeting minutes, in which the central bank once again said it has room for further monetary policy easing if needed. The bank, however, added current economic data suggested the economy does not need more stimulus any time soon.

Australia's government said its forecast budget deficit will rise to A$37.4 billion ($27.13 billion) in the year to June due to falling commodity prices affecting key exports and thus reducing tax revenue.

Shares in Rio Tinto and BHP Billiton, Australia's two biggest miners, closed down 1 and 2 percent.

Iron ore producers were mixed. Fortescue Metals closed up 0.56 percent while Atlas Iron, Mount Gibson, BC Iron was down 6.25 percent. Iron ore prices traded at $37.50 a tonne in Asian trade.

Shares in Qantas Airways lost morning gains and traded down 2.38 percent. Earlier, the company said it expected first-half underlying profits before tax to double on-year to between A$875 million ($633.6 million) and A$925 million.

The Australian dollar traded higher at 0.7251 against the dollar.

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