Nikkei and ASX close lower as weaker dollar and lower oil prices weigh

The Japanese benchmark closed lower on Monday after seven straight sessions of gains as the yen rose sharply against the dollar and oil prices slipped.

Japan's Nikkei 225 closed down 0.13 percent, or 24.33 points, at 18,356.89, clawing back earlier losses of more than 0.8 percent. The weakness in the Japanese benchmark is likely due to yen strength, which is seen as a negative for Japanese export-oriented stocks.

The dollar fell more than 1 percent against the dollar earlier, but was trading at 112.13 around 2:10 pm HK/SIN. The dollar/yen hovered at levels above 113 last week.

Australia's ASX 200 finished 0.79 percent lower, or 43.385 points, at 5,464.4, weighed by weaknesses in its energy sub-index, which fell 1.93 percent, and its materials sub-index, which was down 1.29 percent.

Tabcorp jumped 1.94 percent at $4.72 per share, after The Mail on Sunday reported that British bookmaker Ladbrokes Coral planned to make a 2 billion pound ($2.5 billion) bid for the Australian betting company.

Kazuhiro Nogi | AFP | Getty Images

In South Korea, the Kospi recovered from earlier losses to close up 0.19 percent, or 3.67 points, at 1,978.13. Hundreds of thousands people rallied in Seoul at the weekend for the fifth straight week of protests against President Park Geun-hye, who is embroiled in a scandal over influence-peddling.

Samsung Electronics shares were trading up 1.64 percent at 1,677,000 won each, after Seoul Economic Daily reported that the electronics giant was considering a split into two companies, as proposed by U.S. activist hedge fund Elliot Management. Samsung Electronic's split would boost shareholder value.

In China, the Shanghai composite finished up 0.46 percent, or 15.16 points, at 3,277.1 while the Shenzhen composite closed down 0.142 percent, or 3.02 points, at 2,126.82. Hong Kong's Hang Seng climbed 0.9 percent by mid-afternoon.

Last Friday, China and Hong Kong securities regulators announced that the long-awaited Hong Kong-Shenzhen stock connect would kick-off on December 5. The trading link would allow foreign investors to trade Shenzhen stocks from Hong Kong.

The dollar index, which tracks the greenback against a basket of currencies, was softer at 100.98 as of 3:12 pm HK/SIN, compared to a surge to 102.07 last week, a level not seen since April 2003.

"We think that the dampening of the dollar strength is temporary. Overall, the dollar momentum remains to the upside amid Trump's vast infrastructure program and Fed imminent tightening," said Cynthia Jane Kalasopatan, market economist at Mizuho Bank, said in a note on Monday.

Markets have been on a roll since Donald Trump's surprise presidential election victory on Nov. 8, with "Trumponomics" expected to mean more fiscal spending and higher inflation, while interest rates are also expected to rise.

The Dow Jones industrial average ended up 0.36 percent at 19,152.14 after a holiday-shortened trading session on Friday, the S&P 500 closed up 0.39 percent at 2,213.35 and the Nasdaq composite closed up 0.34 percent at 5,398.92.

The small-cap Russell 2000 hit record intraday highs before closing up up 0.38 percent at 1,164.14, a record high close, and notching its longest winning streak since 1996.

"We have a number of really bullish set-ups in global indices at present, obviously, we've seen this front and center in all four main U.S. indices, the Nikkei 225 and also the Chinese CSI 300, which is near the year's highs," Chris Weston, chief market analyst at spreadbettor IG, said in a note on Monday. "However, we can now add the ASX 200, which, after pushing through 5,500 is eyeing the year's highs of 5,611 itself."

Energy shares will also likely be in focus after Reuters reported that Saudi Arabia said it would not attend talks on Monday with non-OPEC members to discuss production cuts, which prompted a fall in crude futures on Friday of more than 3 percent on Friday in the U.S. On Monday in Asian trade, U.S. crude futures were down 0.26 percent at $45.93 a barrel, while Brent futures dropped 0.23 percent at $47.13.

On Sunday, Saudi Arabia's energy minister Khalid al-Falih said he believed the oil market would balance itself in 2017 even if producers did not intervene, and that keeping output at current levels could therefore be justified. He said that Saudi Arabia was not attending the Monday meeting because OPEC members themselves had not agreed on production levels.

"Saudi Arabia's Oil Minister Khalid-Al-Falih opened the door to the prospect that this Wednesday's meeting in Vienna will not now agree to a production cut," said David de Garis, director of economist at National Australia Bank, in a note on Monday.

Across the Asia Pacific region, major oil companies were mostly lower. Australia's Santos dropped 2.63 percent to A$4.08 per share, while Oil Search stock fell 3.03 percent to A$6.73 and Japan's Inpex was down 1 percent at 1,088 yen. China's Shanghai Pechem bucked the trend to trade up 1.31 percent at 6.19 yuan, along with South Korea's S-Oil which was up 0.82 percent at 86,000 won.

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