Asia report: Markets mixed as oil prices remain high

In Japan, the Nikkei 225 eked out gains of 0.6% to 22,001.32, as the yen weakened 0.05% against the dollar to last trade at JPY 108.17.

Of the major components on the benchmark index, automation specialist Fanuc was down 0.93% and technology conglomerate SoftBank Group slid 3.04%, while fashion firm Fast Retailing added 0.36%.

The broader Topix index was ahead 0.29% in Tokyo, to close its trading session at 1,614.58.

On the mainland, the Shanghai Composite was 1.74% lower at 2,978.12, and the smaller, technology-heavy Shenzhen Composite lost 2% to 1,651.35.

Fresh reports out of China led to renewed concern around the country’s real estate and residential construction market, with new home prices growing at their slowest pace in almost a year in August.

A slowing economy, combined with restrictions from Beijing around speculative purchases, have led to weakened demand in the sector.

South Korea’s Kospi was 0.01% higher at 2,062.33, while the Hang Seng Index in Hong Kong lost 1.23% to settle at 26,790.24.

Both of the blue-chip technology stocks were weaker in Seoul, with Samsung Electronics falling 0.42% and chipmaker SK Hynix off 0.13%.

Oil prices had come off their session highs as the region went to bed on Tuesday, but remained strong, with Brent crude last down 1.65% at $67.90 per barrel and West Texas Intermediate off 1.6% at $61.91.

Prices for the thick black stuff had leapt on Monday, following a series of drone attacks on the biggest oil processing facility in the world, located in Saudi Arabia, over the weekend.

The attacks led to a stoppage on the production of around 5.7 million barrels of oil per day, or around half of the country’s daily exports and more than 5% of the world’s production.

Houthi rebels from Yemen had claimed responsibility for the attack on Saturday, although US president Donald Trump has chosen to blame Iran - something backed up by Saudi Arabian military, who said it was carried out using “Iranian weapons”.

“The supply shortage in Saudi Arabia should keep oil prices sustained above the pre-attack levels for the weeks to come,” said London Capital Group senior market analyst Ipek Ozkardeskaya.

“We could see a floor building near $60 in WTI crude and near $65 in Brent.

“Meanwhile, the expectation that the trade talks between the US and China could lead to a temporary agreement should give an additional boost to energy prices.”

In Australia, the S&P/ASX 200 managed gains of 0.33% to 6,695.30, with most subindices in the green, and the energy sector adding 1% by the end of Sydney’s trading day.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 broke out of its six-day losing streak to gain 0.3%, closing at 10,868.03.

Both of the down under dollars were weaker on the greenback, with the Aussie last off 0.51% at AUD 1.4635, and the Kiwi weakening 0.31% to NZD 1.5811.