[HONG KONG] Asian stock markets fell back on Friday after a two-day rally boosted by the Federal Reserve's interest rate hike, as the rout in oil prices returned to centre stage, with commodity-linked shares again taking a hit.
Exchanges from New York and Sao Paolo to London and Tokyo cheered the Fed's widely-expected decision Wednesday to lift borrowing costs for the first time in almost a decade, which was taken as a sign of its confidence in the world's top economy.
However, while European equities extended their advance on Thursday, Wall Street's three main markets were dragged down by energy firms as oil prices tanked again on weak demand, a torpid global economy and a strengthening dollar.
Some of the names in the energy sector tumbled in US trade, including ExxonMobil, Chevron, copper and gold producer Freeport-McMoRan, and mining equipment maker Caterpillar.
Those losses were mirrored in Asia, with Sydney-listed Rio Tinto down three per cent and BHP Billiton falling 2.4 per cent, while Hong Kong-listed PetroChina shed 2.3 per cent and CNOOC gave up two per cent. Inpex sank 1.7 per cent in Tokyo.
Among stock markets, Tokyo was 0.2 per cent lower by lunch, with investors awaiting a Bank of Japan policy meeting to see what its response will be to the US rate hike, with analysts predicting it will hold off loosening monetary policy further.
Hong Kong shed 0.2 per cent and Sydney gave up 0.1 per cent.
Bernard Aw, Market Strategist at IG in Singapore, said: "The bounce yesterday was not premised on solid fundamentals. Despite the mere certainty provided by the Fed action, the road ahead does not seem hunky dory for global equities.
"The fact that the US stock markets gave back... attested to that. The force on the downside is strong." But Shanghai - which Friday marks 25 years since its first trade - jumped 0.6 per cent on data showed new-home prices rose in November in more Chinese cities than the previous month thanks to government stimulus measures.
"The major driver this week has been US dollar strength against a backdrop of ongoing refusal to respond rationally to the current market surplus on the supply side," Michael McCarthy, a chief markets strategist at CMC Markets in Sydney, said.
"We're just not seeing the normal production cuts we'd expect given the plummet in prices," he told Bloomberg News.
The US rate rise sent the greenback rallying on Wednesday and Thursday, making oil more expensive for customers using weaker currencies.
That exacerbated pressure on the black gold, which has plunged about 15 per cent since December 4 when the Opec oil exporters' group decided not to put a limit on output despite a global glut and anaemic demand.
The dollar also eased back against its rivals but held most of its recent gains, while emerging currencies were mostly lower. The South Korean won was down 0.3 per cent while Malaysia's ringgit and the Indonesian rupiah each shed 0.1 per cent. Taiwan's dollar eased 0.2 per cent.