Asia: Stocks mixed amid geopolitical tension, oil eases from highs

[TOKYO] Asian stocks were mixed in early trading on Wednesday as investors assessed the geopolitical risk surrounding Turkey's downing of a Russian fighter jet, while crude oil prices eased from two-week highs.

MSCI's broadest index of Asia-Pacific shares outside Japan nudged up 0.2 per cent. Australian shares dipped 0.1 per cent while Japan's Nikkei shed 0.4 per cent. South Korea's Kospi was virtually unchanged.

Turkey shot down a Russian craft near the Syrian border on Tuesday, saying the jet had violated its air space, in one of the most serious publicly acknowledged clashes between a NATO member country and Russia for half a century. "The conclusion would be Russia would not want to take this too much further at a time when its economy is seeing some green shoots after the past two years of sanctions," said Evan Lucas, market strategist at IG in Melbourne, adding that Turkey is Russia's second-biggest energy customer.

The incident briefly sparked oil supply fears and sent crude prices surging overnight to 2-week highs.

US crude was down 0.4 per cent at US$42.71 a barrel after jumping nearly 3 per cent on Tuesday.

The overnight jump in crude favoured commodity currencies such as the Australian dollar. The Aussie was steady at US$0.7258 after hitting a 1-month high of US$0.7276.

The Canadian dollar fetched C$1.3308 to the greenback after pulling away from a 2-month low of C$1.3436 struck earlier this week.

The US dollar was lower, hurt in part as the latest flare up in geopolitical tensions generated demand for safe haven Treasuries and drove their yields lower.

The dollar index fell to 99.564, retreating from an 8-month peak of 100.000 set on Monday.

Against the yen, the greenback dipped to a 1-1/2 week low of 122.31 and has since edged back to 122.46.

The euro was little changed at US$1.0648.


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