A drop in oil prices weighed on Asia stocks on Thursday, ahead of inflation, jobs and exports data expected from the U.S. and testimony from Federal Reserve Chairwoman Janet Yellen on the economic outlook to Congress later in the day.
Australia's S&P/ASX 200 recovered to trade up 0.1% after being in the red for most of the morning session, with BHP Billiton declining 0.2% and Rio Tinto recovering to trade higher by 0.2%. However Oil Search fell 0.9% with Woodside Petroleum losing 2.3%.
"The strengthening U.S. dollar is buffeting commodity prices," said Michael McCarthy, chief market strategist at CMC Markets in Sydney. Stock market declines in the U.S. and Europe also weighed on equities in Asia, he said.
The dollar touched a 13-year high on Wednesday, boosted by rising U.S. bond yields and expectations of a significant fiscal stimulus under the administration of President-elect Donald Trump. The ICE Dollar Index, which measures the U.S. currency against a basket of six others, rose to 100.57 earlier in the session, its highest level since April 2003. It was last trading 0.2% down at 100.23.
Crude prices declined following data from the U.S. Energy Information Administration on Wednesday that crude oil inventories in the country were higher than expected last week on rising imports and a buildup in Oklahoma. Inventories of crude rose for the third consecutive week to 5.3 million barrels in the week ending Nov. 11, compared with expectations of an increase of 1.5 million barrels. Brent crude, the international benchmark, was last trading down 0.3% at $46.48 a barrel.
The data overshadowed comments from Russian Energy Minister Alexander Novak who told reporters at a Moscow energy forum that Russia would "support any decision" adopted by the Organization of the Petroleum Exporting Countries. Crude prices had surged nearly 6% Tuesday on news that OPEC would try to limit production ahead of a meeting in Vienna.
In Japan, the Nikkei Stock Average was down 0.3% with Japan Petroleum Exploration down 0.7%, recovering from a decline of 1.2%. A 0.1% gain in the yen against the dollar hurt equities as a stronger currency weighs on corporate profits.
Korea's Kospi index also slipped, by 0.2%, and Hong Kong's Hang Seng lost 0.1% and the Shanghai Composite fell 0.3%.
Investors also sold shares to hold cash ahead of expected volatility. Later in the U.S. on Thursday, data on October consumer prices, weekly jobless claims and export sales are due. But the market will be focused on a U.S. congressional testimony from U.S. Federal Reserve Chairwoman Janet Yellen. New York Fed President William Dudley and Fed Board Governor Lael Brainard will also be speaking at public events.
"Assets are repricing for the likelihood of a Trump-as-Reagan scenario," said Timothy Condon, head of research for Asia at ING Financial Markets, meaning he expects Mr. Trump to spend aggressively. The asset repricing had taken a breather Wednesday, he said.
Gold, considered a hedge against volatility, was up 0.3% in early Asian trade.
Ese Erheriene contributed to this article.
Write to Kenan Machado at firstname.lastname@example.org
(END) DowJones Newswires
November 16, 2016 21:55 ET (02:55 GMT)
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