Asia: Stocks drop as Japan's Topix tumbles with commodity shares

[TOKYO] Asian stocks fell, with the regional benchmark index retreating from a four-month high, as crude plunged and Japanese shares tumbled on a stronger yen after oil talks ended without an agreement on limiting supplies.

The MSCI Asia Pacific Index fell 1.1 per cent to 130.75 as of 9:07 am in Tokyo. The gauge surged 17 per cent from its Feb 12 low through last week, recouping all of its losses for 2016, as the Federal Reserve reassured investors that it won't rush to increase borrowing costs and a rebound in commodity prices boosted mining and oil producers.

West Texas Intermediate lost as much as 6.8 per cent to US$37.61 a barrel in early trading.

"We're seeing a knee-jerk reaction to the plunge in oil," Tim Schroeders, a Melbourne-based portfolio manager at Pengana Capital Ltd, who helps oversee about US$1.2 billion in assets, said by phone.

"That's going to trigger some profit-taking in equities. The market may have run ahead of itself and company results may not back up the recent bullishness. We're not seeing a lot of earnings growth from corporates."

Japan's Topix index fell 3.1 per cent as the yen rose to 108.11 per US dollar. The nation's policy makers won little sympathy from its Group of 20 counterparts for possible intervention to reverse the currency strength.

Prime Minister Shinzo Abe increased the number of rescue workers to 25,000 in the earthquake-stricken south of the country where 41 people have died since Thursday in the nation's most devastating natural disaster since March 2011.

South Korea's Kospi index lost 0.5 per cent. Australia's S&P/ASX 200 Index dropped 0.5 per cent. New Zealand's S&P/NZX 50 Index was little changed. Markets in China and Hong Kong have yet to start trading.

Futures on the FTSE China A50 Index fell 0.2 per cent in their most recent trading, while those on the Hang Seng Index lost 0.1 per cent. The Shanghai Composite Index fell 0.1 per cent on Friday from a three-month high, amid speculation improving economic data in March and a surge in new credit will prompt authorities to refrain from adding stimulus. March data on Chinese property prices are due out today.

E-mini futures on the Standard & Poor's 500 Index slid 0.6 per cent. The US equity benchmark index slipped 0.1 per cent on Friday as technology and energy shares declined.

BLOOMBERG