Tokyo, Japan (BBN) – Asian markets traded mostly lower on Wednesday morning, as oil prices remained under pressure after data overnight showed a build-up in US crude inventory.
In Japan, the Nikkei Stock Average fell 0.19 per cent, while across the Korean Strait, the Kospi was down 0.83 per cent, reports CNBC.
Hong Kong’s Hang Seng Index was down 0.46 per cent, while Chinese mainland shares were also lower.
The Shanghai composite was down 0.37 per cent and the Shenzhen composite fell 0.29 per cent.
Australia’s ASX 200 bucked the generally downward trend in the region to trade up 0.24 per cent, but the energy sector declined 0.86 per cent.
Oil plays in the country were mostly lower, with Santos shares losing 1.16 per cent, Oil Search down 0.65 per cent and Beach Energy lower by 2.32 per cent.
Oil prices declined on Wednesday, extending Tuesday’s more than 1 per cent drop after data showed a build-up in US crude inventory.
Reuters reported weekly data from the American Petroleum Institute (API) estimated US crude stockpiles surged 14.2 million barrels last week.
U.S. crude fell 1.17 per cent to $51.56 a barrel by 10:58am HK/SIN on Wednesday, while global benchmark Brent lost 0.84 per cent to $54.59.
Some analysts had expected the decline in oil prices following the API numbers.
“The herd, already nervous from the previous days price action, turned en masse and ran off the cliff,” Jeffrey Halley, a senior market analyst at OANDA, said in a note.
Halley expects crude prices to remain under pressure. “Clearly increased shale production is now taking its toll,” he said, adding if the Energy Information Administration’s crude inventory numbers, due later in the global day, show a large build, prices could fall further.
Resources producer BHP Billiton fell 0.71 percent, after reports said the miner planned to halt production at a Chilean copper mine due to a workers’ strike on Thursday.
Reuters reported that BHP said it could not guarantee the safety of the 80 workers the Chilean government had authorized to remain at the Escondida mine to perform “critical duties” like equipment upkeep and adherence to environmental protocols.
In the currency market, the dollar traded relatively higher against a basket of currencies at 100.35 at 11:03am HK/SIN, climbing from levels below 100 in previous sessions.
“Over the past few days…slowly but surely the dollar has managed to crawl its way back up,” said Rodrigo Catril, a currency strategist at the National Australia Bank, in a note.
“To some extent, the dollar has won the least-ugly contest as the focus appears to have shifted away from the US towards political and fiscal uncertainty in Europe,” said Catril.
Among other major currency pairs, the yen traded at 112.10 against the dollar, strengthening from levels above 113.4 last week.
The stronger yen likely pressured Japanese exporters, with Toyota shares down 0.30 per cent, Mazda down 1.35 percent and Sony off by 1.33 per cent.
Fujitsu shares declined 3.29 per cent, after Reuters reported the electronic conglomerate’s biggest shareholder, Fuji Electric, planned to sell about $1 billion worth, or about 8.2 percent, of stock.
Elsewhere, the Australian dollar fetched $0.7635, while the euro traded at $1.0684.