Asia: Stocks mixed as oil prices retreat on stronger dollar

Asian stocks were mixed on Friday as oil prices retreated on a stronger US dollar and profit taking in the Americas.

Japan’s Nikkei 225 closed up 0.36% to 16,545.82 points, the Hong Kong Hang Seng index dropped 0.37% to 22,937.22 points and the Shanghai Composite rose 0.13% to 3,108.10 points.

Oil prices fell as the dollar strengthened with Brent crude down 0.65% to $50.56 per barrel and West Texas Intermediate down 0.06% to $48.19 per barrel in early trade. However, crude remained near two-month highs with Brent sitting above $50 a barrel for the first time in five weeks following a surge in prices on Thursday.

A weaker yen was seen to support Japanese equities while profit taking pressure in Greater China dragged on Hong Kong stocks.

“A USD dollar off its worst levels has offered Japan’s Nikkei and its exporters some respite via a slight pullback in the Yen, which is managing to hold above the all-important 100 mark versus the greenback,” said analysts Mike van Dulken and Augustin Eden at Accendo Markets.

The yen is down 0.29% against the dollar.

Meanwhile, investors continued to scratch their heads over the Federal Reserve’s July meeting minutes, released on Wednesday. The minutes showed policymakers were divided on their views for the timing of the next interest rate hike.

“The minutes of the July FOMC meeting showed caution, but were broadly supportive of our out-of-consensus view that the Fed will raise the fed funds rate by 25bp in September,” said BNP Paribas, pointing to hawkish speeches this week from Federal Reserve officials William Dudley and Dennis Lockhart.

Traders were also still mulling over China government data on Thursday, which showed average housing prices were broadly steady in July compared to a month earlier. Shares in Chinese property developers Agile Group Holdings and China Evergrande Group dropped.

Elsewhere, shares in trading firm Mitsui & Co. and oil explorer Inpex Corp. gained in Tokyo.

Australian oil and gas explorer Woodside Petroleum Ltd. rallied even as its first half profit missed expectations after RBC Capital Markets said operating costs were “pleasingly better” than forecast.