By Willa Plank
Asian equity markets were broadly lower on Thursday, with traders focused on oil-price declines overnight and disappointing data out of China.
Japan’s Nikkei /zigman2/quotes/210597971/delayed JP:NIK +1.15% was down 0.3%, Australia’s S&P/ASX /zigman2/quotes/210598100/delayed AU:XJO +0.54% fell 1.2%, while Taiwan’s Taiex was down 0.7%. Bucking the declines, Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +1.11% gained 0.5%.
U.S. oil prices /zigman2/quotes/209727494/delayed CLZ26 -0.29% fell to a three-week low overnight, pushing energy-related shares further into the red during Thursday’s session. Investors are increasingly concerned that the Organization of the Petroleum Exporting Countries won’t reach consensus on a production-cut deal. However, crude-oil prices recovered slightly in Asian trade.
Russia’s unclear stance on the production-cut deal is fueling uncertainty. The country had previously signaled its willingness to join an OPEC cut, but recent comments by its oil officials show the country is likely pivoting away.
Among key energy shares in Asia, Woodside Petroleum /zigman2/quotes/203437212/delayed AU:WPL +2.50% in Australia was down 1.5%, while Chinese oil major PetroChina /zigman2/quotes/204979431/delayed HK:857 0.00% slumped 2.0% in Hong Kong. Cnooc /zigman2/quotes/203421416/delayed HK:883 -0.66% fell 2.7%, after the company reported that production fell 7.7% in the third quarter from a year earlier.
The earlier oil-price declines came even as the U.S. reported a 553,000-barrel drop in crude inventories. However, the decline was centered on the U.S. West Coast, which is isolated from the rest of the network, said ANZ Research, and which was therefore discounted.
“Inventories actually increased along East and Gulf Coasts,” said ANZ.
Meanwhile, Chinese stocks retreated after data released early Thursday showed that growth in China’s industrial profits slowed in September.
China recorded 7.7% on-year growth in industrial profits for the month, sharply down from the 19.5% growth the previous month, according to the National Bureau of Statistics.
The Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP +1.15% ended down 0.1% on the data, while stocks in Hong Kong were hit harder. The Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +0.81% was off 0.8% and the China Enterprises Index, which tracks large Chinese firms listed in Hong Kong, closed down 0.9%.
China’s central bank continued to weaken the yuan, fixing it 0.05% weaker against the U.S. dollar on Thursday. However, unlike previous yuan depreciation pushes, traders seemed to be taking this weakening cycle in stride.
“A flexible exchange rate means it’s more market based, and that means if there’s a strong dollar, [the yuan] will weaken,” said Ben Sy, head of fixed income, currencies and commodities at J.P. Morgan’s private bank in Asia.
“The market is pretty calm; no one is really panicking,” he said.
Earnings results have also affected key Asian markets. In Australia, National Australia Bank /zigman2/quotes/210431826/delayed AU:NAB +0.57% Thursday said its full-year net profit tumbled to 352 million Australian dollars (US$269 million) in the year through September from A$6.34 billion a year earlier, as it booked losses on the sale of its U.K. banking business and control of its life insurance operations. Still, NAB’s shares ended up 0.5%.
In Japan, electronics maker Canon /zigman2/quotes/207639533/delayed JP:7751 +1.29% closed down 3.0% after the company lowered its profit guidance for the year ending in December, citing the negative impact of the yen strengthening. Messaging application provider Line /zigman2/quotes/205382025/delayed JP:3938 -0.51% was down 6.3% after the company posted results that undershot market expectations.
Looking ahead, investors will be focusing on third-quarter U.S. economic data, scheduled to be released Friday, for clues on the timing of the next U.S. interest rate increase.
—Jenny Hsu, Kosaku Narioka, Robb M. Stewart, Yifan Xie, Saumya Vaishampayan and Liyan Qi contributed to this article.
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