Asia report: Most markets lower after oil price decline

Markets in Asia were mostly lower at the end of Tuesday, with Japan a notable exception, with most indices led lower by energy stocks amid a decline in oil prices.

In Japan, the Nikkei 225 was ahead 0.44% at 22,697.36, as the yen strengthened 0.33% against the dollar to last trade at JPY 112.66.

The rail sector led the gainers in Tokyo, although oil stocks and miners followed their regional peers into the red on the broader index.

On the mainland, the Shanghai Composite was down 0.55% at 2,79862, and the smaller, technology-heavy Shenzhen Composite slipped 0.17% to 1,600.08.

It was the second day of declines for Chinese markets, after fresh data on Monday showed economic growth slowing to 6.7% in the second quarter, from 6.8% in the period immediately prior.

South Korea’s Kospi slid 0.18% to 2,297.92, while the Hang Seng Index in Hong Kong was 1.25% below the waterline at 28,181.68.

Energy plays led the fallers in the special administrative region, with CNOOC and Petrochina both under the cosh.

Over in Seoul, carmakers and retailers were in the green, while the blue-chip technology stocks were lower, led by Samsung Electronics, which fell 0.43%.

“True to form, and in stark contrast to the unusual calm of last year, 2018 has seen a return to more volatile trading conditions in global emerging market equities,” noted Old Mutual Global Investors’ head of emerging markets Nick Payne on recent volatility.

He added that trade tensions had cast an additional shadow on the Asian region, above and beyond currency concerns and turbulent oil prices.

Oil prices were down after US Treasury secretary Steve Mnuchin said on Monday that Washington would consider waiving sanctions on Iran for selected oil producers.

Concerns around the possibility of oversupply were also fuelling declines, according to some market watchers.

Crude bounced back somewhat as the region went to bed, with Brent last up 0.49% at $72.19 per barrel, and West Texas Intermediate ahead 0.22% at $68.21.

In Australia, the S&P/ASX 200 finished down 0.61% at 6,203.60, with oil producers Santos and Woodside Petroleum falling 2.13% and 2.42% respectively.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was off 0.02% at 8,978.89, led lower by outdoor gear brand Kathmandu and specialist dairy exporter A2 Milk, which were off 2.9% and 1.7% respectively.

The down under dollars were mixed against the greenback, with the Aussie last 0.33% weaker at AUD 1.3520, and the Kiwi 0.25% stronger at NZD 1.4701.