Asian Stock Fall as Oil Prices Resume Downtrend

By Investors Hub

Asian stocks fell broadly on Thursday as oil prices resumed a downtrend and minutes from the Federal Reserve’s last meeting showed a lack of consensus among members over when to start reducing the Fed’s securities portfolio.

Fed officials were determined to continue raise interest rates even with muted inflation levels, but they were divided in their opinions on the future pace of U.S. interest rate increases, the minutes showed.

Oil futures were slightly higher in Asian trading after tumbling around 4 percent overnight on news of rising OPEC supplies and a stronger dollar.

The yen was little changed against the dollar in the wake of mixed signals from the Fed, while gold held steady after hitting an eight-week low in the previous session.

Japanese shares hit three-week lows on a stronger yen amid rising geopolitical tensions on the Korean peninsula. The Nikkei 225 Index fell 87.57 points or 0.44 percent to 19,994.06, the lowest level since June 16th, while the broader Topix Index dropped 0.19 percent to 1,615.53.

Banks Mizuho Financial, Mitsubishi UFJ Financial and Sumitomo Mitsui Financial ended down between 0.3 percent and 0.7 percent as the FOMC minutes failed to provide clarity around the Fed’s next move on rates and its plans to trim its bond portfolio.

Lawson shares tumbled 3.4 percent after the convenience-store operator reported a drop in its first-quarter operating profit. Meanwhile, shares of construction companies in the Kyushu region soared after torrential rain devastated parts of the island.

Australian shares ended a choppy session marginally lower, with banking stocks succumbing to selling pressure after the Federal Reserve’s policy minutes showed a lack of consensus on future policy moves.

The benchmark S&P/ASX 200 Index slipped 4.50 points or 0.08 percent to 5,758.80, while the broader All Ordinaries index closed 3.50 points or 0.06 percent lower at 5,797.50.

The big four banks fell between 0.3 percent and 0.9 percent. Energy majors Oil Search, Origin Energy and Santos dropped over 1 percent each after oil prices suffered their largest drop in a month overnight.

Construction giant CIMIC Group lost 1.8 percent after offloading its 23.6 percent stake in Macmahon Holdings. Defensive stocks found some support, with bio-pharmaceutical giant CSL rising 1.5 percent and retailer Wesfarmers closing 1 percent higher.

In economic news, Australia posted a seasonally adjusted merchandise trade surplus of A$2.471 billion in May, the Australian Bureau of Statistics said. That exceeded forecasts for a surplus of A$1.10 billion following the downwardly revised A$90 million surplus in April.

Meanwhile, China’s Shanghai Composite Index rose 5.38 points or 0.2 percent to 3,212.51 amid strong gains by resource stocks. Hong Kong’s Hang Seng Index dipped 56.75 points or 0.2 percent to 25,465.22.