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Asia markets mixed as crude's fall weighs Australia's oil majors; Mexican peso gains

Asian stock markets were mixed on Monday, with falling crude oil prices weighing on Australian oil majors' shares.

Down Under, the ASX 200 closed up 0.15 percent, or 8.01 points, at 5,475.4, buoyed by the materials subindex up 0.4 percent, and the financial sector, which was higher by 0.47 percent. The Australian benchmark's gains were offset by losses in its energy subindex, which fell 0.81 percent.

Among Australian oil majors, Santos fell 2.82 percent, Oil Search was lower by 1.46 percent and Origin Energy slid 1.07 percent.

Crude oil prices recovered from earlier losses of more than 1 percent; U.S. crude futures were trading down 0.72 percent at $49.44 a barrel, while global benchmark Brent was down 0.65 percent at $51.60.

In South Korea, the Kospi finished up 0.15 percent, or 3.02 points, to 2,056.82, recovering from earlier losses of more than 0.53 percent.

Mainland Chinese markets were higher, resuming trade on Monday after the Golden Week hiatus. The Shanghai composite closed up 1.45 percent, or 43.44 points, at 3,048.143, while the Shenzhen composite ended up 1.893 percent, or 37.775 points, at 2,033.383.

Over in Thailand, the SET index was down 2.97 percent, likely due to Sunday's news that 88-year old King Bhumibol Adulyadej was in unstable condition after receiving hemodialysis treatment. The dollar/baht currency pair was trading up 0.49 percent, as of 2:49 pm HK/SIN.

Markets in Hong Kong, Japan and Taiwan were shut for public holidays.

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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In Australia, shares of Macquarie Group were up 0.26 percent, after the Financial Times reported that the Australian bank was in final negotiations to acquire the Green Investment Bank in a 2 billion pound ($2.49 billion) deal.

Spanish-controlled engineering contractor CIMIC Group said on Monday that it would offer A$3.15 a share to buy the stock it doesn't already own in rival UGL. The cash bid was equivalent to a 47.2 percent premium on Friday's closing price, and UGL stock surged 48.6 percent on the news, while CIMIC Group was up 0.59 percent.

In June, UGL had warned that delays at one of its largest oil and gas projects would hurt profit, which sent its shares down by one-third in one day, Reuters reported.

Also on Monday, Australian Mines shares climbed 54.55 percent, after Reuters reported news of project acquisitions.

In South Korea, Samsung Electronic's shares fell 1.52 percent, after the smartphone maker said it would temporarily suspend Note 7 production following reports of fires in replacement devices, Yonhap News Agency reported.

Singapore-listed Noble Group's shares rose 6.77 percent, after it announced the sale of its U.S. energy unit to Calpine, in a deal valued at $1.05 billion. The embattled commodity trader's shares have fallen 32.19 percent year-to-date.

In currency markets, China's central bank set the yuan midpoint at 6.7008 against the dollar, the weakest midpoint for the yuan since September 2010. The currency is allowed to trade in a band of 2 percent on either side of the daily midpoint.

The dollar-yuan pair was trading up 0.46 percent at 6.6991 as of 1:29 pm HK/SIN.

"It's no surprise that the People's Bank of China (PBOC) official fix today of 6.7008 recognized the U.S. dollar strength recently. But a yuan fix that is higher than the July high this year, and also the highest in six years is a big deal in many respects," said Greg McKenna, chief market strategist at AxiTrader, in a Monday note.

The Chinese renminbi was officially included in the International Monetary Fund's Special Drawing Rights basket of currencies on October 1.

The dollar was down against the Mexican peso, fetching 18.9992 pesos at 1:43 p.m. HK/SIN, but off a low of 18.9007 pesos, a decline of around 2 percent, as the pesos hit its highest levels in nearly a month as the U.S. presidential debate kicked off, in a signal that markets were lengthening the odds on a Trump victory after the second U.S. presidential debate.

The race for the White House was at the center of U.S. news at the weekend, after a 2005 "hot mic" recording emerged of GOP nominee Donald Trump making crude comments about women. Numerous Republican senators said they could no longer back the real estate mogul as the party's presidential nominee, but Trump insisted he would not step aside.

The peso's gains came even as the dollar index, which measures the greenback against a basket of currencies, was trading at 96.598, up from levels below 95.600 early last week.

On Friday, the pound fell sharply to touch $1.1819, a fresh 31-year low, in early trade, in what was described as a "flash crash." Cable was trading at $1.2383 as of 2:50 pm HK/SIN.

"The sterling weakness is also presenting a threat for the Fed, as the dollar is becoming stronger and stronger. This makes the Fed increasing the interest rates a little bit tricky," Naeem Aslam, chief market analyst at ThinkMarkets, said in a Monday note.

On Friday, U.S. September nonfarm payrolls missed expectations, increasing by 156,000, compared with a Reuters poll forecasting 176,000 new jobs. The payrolls report is a closely-watched indicator by the Federal Reserve of the U.S. economic strength.

"I thought it was a pretty good report. I understand its a little weaker than the market's expectations, but at 156,000 [jobs added], that's a pretty good pace," Charles Evans, president of the Chicago Federal Reserve, told CNBC in an exclusive interview.

"There's still no real sign of labor market tightening, I think there's still some ways to run," Evans added. "Based on upon my outlook, December could be an appropriate time to [raise rates], but i don't see any urgency either."

Spot Gold was volatile during Asian trade, and was up 0.67 percent at $1,264.20 an ounce as of 2:50 pm HK/SIN.

"Although Friday's mixed NFP caused the yellow metal to experience a slight rebound, this technical bounce could offer an opportunity for bears to install heavy rounds of selling," said Luzdary Hammad, research analyst at ForexTime, in a Monday note. "In this period of renewed U.S. rate hike hopes, sentiment remains bearish towards the zero-yielding metal with further declines expected as the dollar strengthens."

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