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Asian Shares Retreat On Oil Slide, Tech Selloff

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Asian stocks closed broadly lower on Tuesday after oil prices fell over 1 percent overnight and Brexit talks did not yield a breakthrough on the withdrawal issues. Encouraging services sector data from China helped to limit regional losses to some extent.

Chinese shares ended lower even as survey results from IHS Markit revealed the country's private sector growth momentum improved marginally in November.

The Caixin composite output index rose to 51.6 from October's 16-month low of 51.0, suggesting the economy has maintained stability and there was no imminent risk of a significant decline in its growth rate.

The pace of manufacturing growth picked up from October's four-month low, while services activity grew the most in three months. China's official nonmanufacturing PMI also rose to 54.8 in November from 54.3 in October.

China's Shanghai Composite index dropped 5.94 points or 0.18 percent to 3,303.68 while Hong Kong's Hang Seng index was down almost 1 percent in late trade.

Japanese shares fell as tech stocks succumbed to heavy selling pressure hit by a tech sell-off on Wall Street overnight. The Nikkei average shed 84.78 points or 0.37 percent to finish at 22,622.38 while the broader Topix index closed 0.23 percent higher at 1,790.97. Advantest, Tokyo Electron and Sumco Corp tumbled 2-4 percent.

Steelmakers JFE Holdings, Kobe Steel and Nisshin Steel climbed 2-3 percent. Nidec rose 1.2 percent on news that it would set up a joint venture with French carmaker PSA to produce motors for electric vehicles.

On the economic front, the latest survey from Nikkei showed that the services sector in Japan continued to expand in November, albeit at a slower pace, with a PMI score of 51.2, down from the 26-month high of 53.4 in October.

Australian shares closed lower, dragged down by financials after the Reserve Bank of Australia left the cash rate on hold for the 16th month in a row, as widely expected, citing low wage growth and subdued inflation.

The benchmark S&P/ASX 200 slid 13.80 points or 0.23 percent to 5,971.80 while the broader All Ordinaries index ended 0.22 percent lower at 6,057.30.

Banks ANZ and Westpac fell around 1 percent each while mining heavyweights BHP Billiton and Rio Tinto lost 1-2 percent. South32 rallied 3.7 percent after the company projected lower output and higher unit costs at its Illawarra Metallurgical Coal operations in NSW for 2017-18.

Telecommunications provider Telstra jumped over 3 percent to extend gains while energy majors Origin Energy, Woodside Petroleum and Oil Search rose between 0.2 percent and 0.8 percent.

In economic releases, activity levels across Australia's services sector improved marginally in November and the country's current account deficit narrowed in the third quarter, while retail sales rebounded in October after months of lukewarm demand, separate reports showed.

Harvey Norman and JB Hi-Fi jumped 6-7 percent after Amazon launched its operations in Australia. AWE fell as much as 10 percent after a Chinese state-owned company formally withdrew it's unsolicited A$430 million bid for the Australian oil and gas company.

Seoul shares inched up on institutional buying, with the benchmark Kospi reversing early losses to close up 8.45 points or 0.34 percent at 2,510.12.

South Korea posted a current account surplus of $5.72 billion in October, the Bank of Korea said - down from $12.29 billion in September. The goods account surplus narrowed to $8.60 billion from $9.16 billion in October last year.

New Zealand shares edged lower, with growth stocks such as Xero and A2 Milk pacing the decliners. The benchmark S&P/NZX-50 index dropped 8.66 points or 0.11 percent to 8,176.21.

Singapore's Straits Times index was marginally lower. Singapore's private sector activity continued to expand in November, and at an accelerated rate, the latest survey from Nikkei showed with a PMI score of 55.4, up from 54.2 in October.

India's Sensex was down half a percent and the Taiwan Weighted declined 0.8 percent while benchmark indexes in Indonesia and Malaysia were little changed.

Overnight, U.S. stocks ended mixed as Senate Republicans narrowly approved a massive tax reform bill over the weekend. The Dow inched up 0.2 percent to reach a fresh record closing high, while the Nasdaq Composite lost 1.1 percent and the S&P 500 slid 0.1 percent.

by RTT Staff Writer

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