Asia: Stocks down, oil pulls back after rally

[HONG KONG] Asia stocks fell on Thursday tracking a sell-off on Wall Street, as oil began to pull back after climbing to a new 2016 high.

Pessimism on trading floors followed weak earnings in the US and Japan and a shaky performance in Asia Wednesday in which an early rally petered towards the end of the day.

Oil prices also failed to hold onto overnight gains which came after official data showed a surprise drop in US commercial crude inventories.

The Nikkei was down 0.4 per cent by the break with Toyota tumbling nearly three per cent after warning that its annual net profit is set to fall by about a third, citing a stronger yen and emerging market slowdown.

The dollar eased to 108.52 yen, up from 108.39 yen on Wednesday in New York.

Scandal-hit Mitsubishi shares were untraded, but based on sell and buy orders it was set to surge 16 per cent after Nissan Motor confirmed on Thursday that it was in talks for a capital tie-up with firm.

Hong Kong shed 0.5 per cent and Shanghai lost 0.8 per cent ahead of the release of fresh economic indicators out of China this week.

A disappointing trade report at the weekend revived concerns about the world's second largest economy, while there are fears Beijing will hold off introducing any fresh stimulus after a government warning over debt levels.

Sydney also slipped 0.5 per cent and Seoul retreated 0.1 per cent.

"There's just enough out there to keep investors cautious," Tim Schroeders, a portfolio manager in Melbourne at Pengana Capital told Bloomberg News.

"We've got earnings disappointments and currency volatility so people are sitting back and waiting as opposed to continuing with the frenzy."

Most energy firms climbed after the Department of Energy said US crude stockpiles slid 3.4 million barrels last week, sparking an oil price rally. Analysts' consensus had been for a rise of 750,000 barrels.

The report send West Texas Intermediate soaring more than three percent and Brent, its highest settlement since last November, while Brent jumped 4.6 per cent.

Both contracts eased about 0.4 per cent early Thursday.

But in Hong Kong energy giant CNOOC climbed one percent and PetroChina added 0.9 per cent, Sydney-listed BHP Billiton put on 0.2 per cent and Woodside Petroleum rallied 2.5 per cent.

Manila dipped 0.9 per cent following its largest two-day gain since 2013 that was fuelled by newly elected President Rodrigo Duterte trying to sooth nervous investors.

In currency markets, the euro was at US$1.1423, down from US$1.1426 Wednesday as Europe saw waning optimism over bailout talks between Greece and the eurozone.

Enthusiasm about Greece seemingly on the way to unlocking fresh bailout money faded, leaving investors to fret about a possible fresh crisis.

AFP