Asian markets traded cautiously in the morning session on Wednesday as the slide in oil prices continued to weigh on investor sentiment. Oil prices remained low during US trading hours as a result of a global supply glut. US West Texas Intermediate (WTI) crude futures settled 14 cents or 0.37 percent lower at USD 37.51 a barrel. Globally traded Brent futures were down 44 cents at USD 40.28 a barrel, hovering near the lowest level since February, 2009.
Evan Lucas, market strategist at spreadbetter IG, said in a note, "OPEC would not cut or even cap production; this has come to fruition as expected. The fallout from the Vienna convention is the group has signaled that it's each to their own." "If we are honest, it's not in OPEC's interest to balance the oil market on the supply side. This will fall to the likes of Canada, Norway, Russia and the US," he added. US markets closed in the red. The Dow Jones Industrial Average dropped 162.51 points or 0.92 percent to 17,568. The S&P 500 was down 13.48 points or 0.65 percent at 2,063.59 while the Nasdaq ended near flat, down 3.57 points or 0.07 percent at 5,098.24.
Nikkei down despite strong economic data; Kospi trades higher Japan posted two consecutive days of positive economic data. On Tuesday, the revised third quarter gross domestic product (GDP), the broadest measure of economic health, number showed the economy was not in technical recession as indicated by the preliminary data. On Wednesday, October core machinery orders, a measure of capital spending in the economy, rose unexpectedly by 10.7 percent on-month, against a Reuters poll of economists that predicted a 1.5 percent decline.
Core machinery orders rose 10.3 percent on-year, also beating expectations. Market reaction, however, was modest as the spillover effect of low commodity prices pushed the Nikkei 225 down 61 points or 0.31 percent at 19,432. Manufacturing stocks traded lower despite the positive economic data. Shares in Komatsu and Hitachi Construction were down between 0.6 and 0.8 percent.
Japanese blue chips were mostly down, with shares in Sony and Mitsubishi Electric seeing losses of more than 1 percent each. Elsewhere, the Nikkei reported that Japan's fiance ministry would ramp up issuance of 40-year government bonds in the next fiscal year to reduce the risk of debt-servicing costs eating into the country's finances. In South Korea, markets traded in positive territory, with the Kospi up 5 points or 0.26 percent at 1,954.
Shares in Lotte Shopping traded 4 percent higher after news broke that its parent company, Lotte Group, would consider listing its Japanese confectionery business in the Japan stock market. South Korean blue chips traded mixed with shares in Samsung Electronics up by 0.4 percent.
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