Asia report: Markets mixed as oil surges ahead

Markets in Asia ended Monday mostly mixed, with oil prices rallying on the shock departure of Saudi oil minister Ali al-Naimi and supply shortages in Canada.

In Japan, the Nikkei 225 ended the session up 0.68% at 16,216.03. During the session, the Bank of Japan released minutes showing regulators agreed the economy was in recovery, but some were concerned about consumer confidence and the effects of negative interest rates on market volatility and investor sentiment.

They said imposing charges on some deposits held by commercial banks had imposed "anxiety among financial institutions and depositors" and made for a "difficult to understand" policy position.

The yen spent much of the session weaker, and was last trading 0.73% away from the greenback at JPY 107.90 per USD.

On the mainland, the Shanghai Composite Index finished down 2.76% to 2,832,91, while the Shenzhen Composite lost 3.59% at 1,804.32.

Hong Kong’s Hang Seng Index finished 0.23% higher at 20,156.81, while in South Korea the Kospi was up 0.45% to 1,967.81.

Seoul was open for the first time since last Wednesday, after a public holiday last Thursday followed by a government-mandated day off on Friday in a bid to temporarily boost domestic spending.

Oil prices rocketed ahead at the start of the session, after wildfires in Canada resulted in half of the country’s oil sands output being suspended over the weekend and Saudi Arabia replaced its long-serving oil minister Ali al Naimi with Saudi Aramco chairman Khalid al-Falih.

Brent crude was last trading up 1.56% at $46.09 per barrel, while West Texas Intermediate was up 2.06% at $45.60.

Investors were still digesting Friday’s non-farm payroll figures, which missed expectations significantly with 160,000 jobs added to the US economy in April.

"A miss for US jobs data on Friday is helping the street see an increased probability of the Fed sitting on its hands for a rate hike, and this is weighing on the USD," noted Parry International Trading managing director Gavin Parry.

There was also disappointing news out of China on Sunday, with exports reported to have shrunk 1.8% from a year earlier and imports plunging 10.9% - both readings extending contractions from March.

In Australia, the S&P/ASX 200 closed 0.54% higher at 5,320.70, having floated above and below the line for much of the session.

The materials subindex in Sydney was down 0.56%, but it was offset by a 1.18% gain in energy and a 0.63% increase for financials.

Oil producers were up in the sunburnt country, with Santos adding 1.7%, Oil Search up 1.18% and Origin Energy improving 2.36%. Materials producers were under pressure, however, with Rio Tinto losing 2.12%, BHP Billiton down 0.27% and Fortescue Metals 2.25% lower in Sydney trading.

New Zealand shares declined 0.2% to sit at 6,885.06 by close, led by subscription television service Sky (unrelated to the British firm). The company’s shares plummeted 7.1%, extending its 15.7% losses on Friday after it revealed subscribers were dropping like flies after last year’s Rugby World Cup.

The down under dollars were both weaker against their American cousin, with the Aussie last trading 0.18% weaker at AUD 1.3599 to the USD and the Kiwi off 0.11% at NZD 1.4642.