Weakening Oil Takes Some Air Out of Asian Stocks

Shares in Asia were mixed on Tuesday, with record gains in the U.S. market overnight offset by a dip in oil prices and a firmer yen.

The Nikkei Stock Average was down 0.4% in early morning trade, flip-flopping between gains and losses. Taiwan's Taiex was down 0.3%, while Australia's S&P/ASX 200 slipped 0.2% as a downswing in oil hit commodity producers. Elsewhere, markets were rising, with the Hang Seng Index up 0.3%, the Shanghai Composite Index up 0.3% and Korea's Kospi rising 0.2%.

Late on Monday, the S&P 500, Dow Jones Average and the Nasdaq Composite all reached record highs—a feat they accomplished last Thursday for the first time since 1999—on the back of hopes for production cuts in the oversupplied oil market.

Brent crude oil eased back from a one-month high in Asian trade, though, and was last down to $48.08 a barrel.

"I don't think that [the U.S. highs are] too significant," said William Ma, chief investment office at Noah Holdings Ltd. The muted impact on Asian stocks was due to the small gains involved, he said.

In Hong Kong and China, stocks were kept afloat by persistent talk that the Shenzhen-Hong Kong Connect trading link would be launched before the end of the year.

China Evergrande Group's Hong Kong shares rose 0.9% after it increased its stake in China Vanke Co. Ltd to 6.8% from 5%. According to Lucror Analytics, Evergrande's accumulation of Vanke shares was puzzling, given that the developer is heavily indebted, having aggressively used debt capital to fund recent expansions and acquisitions. Vanke was last trading up 2.7%.

The FTSE Bursa Malaysia Index climbed Tuesday morning alongside positive Asian markets lifted by expectations of more monetary easing around the globe. The Malaysia 30-stocks benchmark index increased 0.5% to 1,700.15 points in early trade and was up 0.4% year-to-date.

Meanwhile, a slightly firmer yen, which typically hurts exporting businesses, did little damage to Japanese auto makers' stocks, which rebounded after sustaining yen-related losses in the previous session. Toyota Motor Corp. was up 0.6%, Nissan Motor Co. Ltd. was up 1% and Honda Motor Co. Ltd. was 0.6% higher.

The market was attempting to shrug off Japan's disappointing gross-domestic-product data for the April-June quarter released on Monday, which weighed in at 0.2%, below an expected 0.7% expansion.

"On the one hand, the economy is not doing well which doesn't look good for domestic profits of Japanese firms," said Marcel Thieliant, senior Japan economist at Capital Economics. However, the weak figures increase the chance of more easing by the Bank of Japan, he said.

In other commodities, copper futures edged lower and nickel sank 0.8%, while gold rose 0.4% to $1,344 a troy ounce.

Looking ahead, South Korea is set to release revised trade data that could dictate momentum for shares.

Dominique Fong and Yantoultra Ngui contributed to this article.

Write to Ese Erheriene at [e-mail]

(END) Dow Jones Newswires

August 16, 2016 00:45 ET (04:45 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.