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Energy stocks decline amid lower oil prices in mixed Asian trade

Markets in Asia Pacific were mixed on Thursday, with energy plays in the region under pressure after oil prices extended their losing streak during the U.S. session.

In Australia, the ASX 200 closed down 64.29 points, or 1.20 percent, at 5,295.50, with most sectors finishing lower. The energy sector finished down 1.76 percent, while the materials sector declined 2.09 percent and the heavily-weighted financials sector was down 0.70 percent.

Japan's Nikkei 225 finished down 55.42 points, or 0.32 percent, at 17,336.42, while across the Korean Strait, the Kospi advanced 10.23 points, or 0.51 percent, to 2,024.12.

Hong Kong's Hang Seng index slipped 0.93 percent in late-afternoon trade. Chinese mainland shares finished modestly lower, with the Shanghai composite down 3.99 points, or 0.13 percent, at 3,112.31, while the Shenzhen composite finished near flat at 2,068.08.

Oil stocks in the region finished mostly lower. Australia energy shares declined, with Santos shares down 1.95 percent, Oil Search was off by 2.36 percent and Woodside Petroleum lost 1.52 percent.

In Japan, shares of Fuji Oil fell 0.94 percent, and Japan Petroleum dropped 0.04 percent. South Korea's S-Oil declined 1.11 percent. Hong Kong-listed shares of CNOOC dropped 3.24 percent, while Petrochina fell 2.54 percent in late-afternoon trade.

Bucking the downward trend were shares of Inpex, which finished up 0.74 percent.

During Asian hours, oil prices traded relatively flat after falling more than 1 percent in the U.S. session on Wednesday, amid concerns over whether OPEC would cut production levels at its November meeting.

Symbol
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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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Reuters reported that these concerns likely overrode positive data from the U.S. Energy Information Administration that showed U.S. crude stockpiles fell 553,000 barrels in the previous week.

U.S. crude futures were at $49.19 a barrel as of 3:12 p.m. HK/SIN, after dropping 1.6 percent during U.S. hours, while Brent was marginally up 0.14 percent at $50.05, following a 1.6 percent overnight decline.

"Although a lack of positive news from OPEC is being cited, I suspect the real reason is positioning in the market," said Jeffrey Halley, senior market analyst at OANDA in a morning note.

"Producers have hedged record volumes into this spike by selling futures. The weight of that selling, in the absence of any meaningful news regarding production cuts, has the large number of freshly minted longs above $50 a barrel starting to throw in the towel," Halley explained.

On the earnings front, South Korean electronics giant Samsung posted a third-quarter operating profit of 5.2 trillion won ($4.5 billion), which was down almost 30 percent on-year but was in line with expectations.

Samsung's mobile revenue showed a 96 percent on-year decline, coming in at 100 billion won, following a massive recall and eventual discontinuation of its Galaxy Note 7 smartphone line. The tech company previously said it expected an operating profit hit of more than $5 billion over the second half of 2016 and the January-March quarter of 2017 due to the Note 7 debacle.

Samsung shares climbed 0.38 percent to 1,573,000 won a share.

Meanwhile, the National Australia Bank (NAB), one of the country's so-called Big Four banks, posted a 4 percent on-year increase in cash earnings to 6.48 billion Australian dollars ($4.95 billion) for its fiscal 2016 full year.

The bank said its statutory net profit of A$352 million, which dropped 94.4 percent on-year, was dragged lower by losses on sale of both the UK-based Clydesdale Bank and 80 percent of NAB Wealth's life insurance business. NAB maintained its final dividend of A$0.99.

NAB shares closed up 0.47 percent, while shares of other big banks declined; ANZ was down 0.57 percent, Commonwealth Bank of Australia slipped 1.62 percent and Westpac was lower by 0.65 percent.

Kazuhiro Nogi | AFP | Getty Images

In the currency market, the dollar index was relatively flat at 98.67 as of 3:22 p.m. HK/SIN, after seeing declines in the previous two sessions.

Investors wondered if the dollar had peaked near-term.

"While dollar/yen remains strong, the greenback is beginning to lose momentum versus the euro, British pound, Swiss Franc and commodity currencies," Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, said in a note.

Other currency majors traded mixed on Thursday afternoon during Asian hours.

The euro traded at $1.0908 as of 3:23 p.m. HK/SIN, similar to its previous close at $1.0907. The Australian dollar retreated to around $0.7617 from levels near $0.770 it reached in the Wednesday session following better-than-expected inflation numbers.

Meanwhile, the yen remained at the 104 handle against the dollar on Thursday, trading at 104.60 in the afternoon local time.

The Dow Jones industrial average rose 30.06 points, or 0.17 percent, to 18,199.33. The S&P 500 fell 3.73 points, or 0.17 percent, to 2,139.43, while the Nasdaq dropped 33.13 points, or 0.63 percent, to close at 5,250.27.

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