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Asia stocks mixed; Shanghai leads losses

Asia stocks were mixed on Thursday, dragged by declines on the mainland, knocking the region's Christmas cheer before the holiday period.

But energy stocks still outperformed amid a recovery in oil prices. U.S. crude rose as much as 1 percent in Asian trade after data on Wednesday showed U.S. crude inventories fell by 5.9 million barrels in the last week, compared with expectations for an increase of 1.1 million barrels.

"One could be forgiven for thinking that Santa's sleigh runs on Light-Sweet Cushing, Oklahoma Crude....Of course, this looks like a temporary bounce with plenty of potential for further declines next year when Iran begins exporting oil again," said IG market strategist Angus Nicholson in a morning note.

A third day of gains on Wall Street helped limit further losses in Asia. More healthy economic data saw all three major U.S. averages rally 1 percent overnight. U.S. personal consumption expenditures rose 0.3 percent on-month in November, adding to the market's optimistic mood one day after better-than-expected third-quarter growth data.

Sydney and Hong Kong had a half-day of trading on Thursday while Tokyo and Shanghai will be the only major Asian markets open on Friday.

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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Shanghai drops 0.7%

China's benchmark Shanghai Composite extended losses after snapping a two-day rally on Wednesday.

Insurers were mixed after regulators issued tighter disclosure requirements for firms buying stakes in listed companies. China Life Insurance climbed 2 percent but Ping An Insurance eased 0.1 percent.

The yuan weakened to 6.4785 per dollar after the People's Bank of China said late on Wednesday that it will extend the currency's trading hours starting January 4. By doing so, trading in the Chinese forex market will overlap with European trading hours, which will boost Beijing's goal of internationalizing the currency.

Hong Kong's Hang Seng Index ended 0.4 percent higher with oil producers Petrochina, Sinopec and CNOOC leading gains by 2-3 percent each,

Nikkei dips 0.5%

Japan's Nikkei index initially opened higher following Wednesday's public holiday but then erased gains in the afternoon session.

News that the government approved a record $800 billion fiscal 2016 budget to boost growth was unable to lift sentiment. Meanwhile, minutes from the Bank of Japan's November policy review confirmed the central bank's easing bias, with members saying more stimulus is warranted if inflation doesn't pick up.

Exporters lost ground as the yen strengthened 0.3 percent against the greenback; Sharp and Toyota Motor lost more than 1 percent each. Toshiba also fell 1 percent following an earlier 2 percent rally on news that India may sign a deal with its unit Westinghouse to build six nuclear reactors.

Oil majors Inpex, JX Holdings and Idemitsu Kosan shot up 2 percent each, tracking higher crude prices.

ASX gains 1.3%

Australia's benchmark S&P ASX 200 index closed at its highest level since December 7, up for the seventh straight session and ending the week 2 percent higher.

In the resource sector, miners BHP Billiton, Rio Tinto and Fortescue Metals added 4-5 percent each amid iron ore's recovery, while energy plays Oil Search and Beach Energy soared 3.7 and 9 percent respectively.

Banks also rallied; National Australia Bank, Australia New Zealand Banking, Commonwealth Bank of Australia and Westpac rose over 1 percent each.

Kospi down 0.4%

South Korean shares reversed gains after hitting a three-week high earlier in the session.

Hyundai Motor ended flat after finally reaching a deal with its labor union that could avoid major production losses at its biggest manufacturing base. The agreement is subject to a vote by union members on Monday.

Retailed were mixed after data showed consumer sentiment fell to a three-month low in December. Lotte Shopping climbed 0.4 percent while Shinsegae and Samsung C&T eased over 1 percent each.