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Asia: Markets down, energy firms hit by oil deal woes
[HONG KONG] Tokyo stocks led a retreat in Asian markets on Wednesday as the yen recovered, while regional energy firms struggled with crude prices on concerns about the chances of success at an upcoming producers meeting.
The Opec oil cartel and Russia are due to gather later Wednesday in Algeria to discuss a global oil glut and overproduction that has strangled prices for more than two years.
However, hopes for a deal to limit output were scythed Tuesday by Iran which said it would not agree to a collective freeze, meaning others - particularly regional rival and Opec kingpin Saudi Arabia - are unlikely to join either.
The news sent both main contracts plunging almost three percent. And on Wednesday they only managed meek recoveries. With West Texas Intermediate up three cents at US$44.70 and Brent 19 cents higher at US$46.16.
"Opec members are peddling their self interests, and while that's the case, there can't be a cooperative effort," Michael McCarthy, chief market strategist in Sydney at CMC Markets, told Bloomberg News.
"There is little possibility of that coming together. Oil is trapped between US$40 and US$50 a barrel, and at this stage, there doesn't appear to be anything on the horizon to break prices out of that range."
Energy firms from Sydney to Hong Kong were in the red, in line with losses on broader stock markets.
By lunch in Tokyo, the Nikkei index was down 1.5 per cent, with a stronger yen dampening buying appetite.
The dollar bought 100.50 yen in early trade, slightly up from 100.36 yen in New York but still off 100.88 yen seen earlier Tuesday in Asia.
Hong Kong eased 0.5 per cent and Shanghai lost 0.2 per cent. Seoul shed 0.4 per cent but Sydney was flat.
The losses followed gains in Asia and New York after Hillary Clinton was judged to have won the first presidential debate with Republican Donald Trump, with the Democrat considered a safer pair of hands politically and economically.
"We have been seeing a pullback in US futures coming into the open session after what was a pretty strong US market, and Europe had a negative night," Angus Nicholson, a market analyst in Melbourne at IG, said. "Oil is certainly not helping too much."
In Hong Kong the Postal Savings Bank of China was flat as it began trading after the world's biggest initial public offering for two years.
PSBC, China's fifth largest lender, raised US$7.4 billion in the IPO, the biggest since Alibaba's US$25 billion New York listing in 2014.
But analysts attributed the lukewarm interest in the IPO to the recent flat performance of large Chinese financial firms on Hong Kong's bourse.