Asia stocks slide on Wall Street losses, oil drops as glut worries return

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Asia stocks slide on Wall Street losses, oil drops as glut worries return

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A man looks at an electronic board showing the Japanese yen's exchange rate against Euro outside a brokerage in Tokyo, Japan,

A man looks at an electronic board showing the Japanese yen’s exchange rate against Euro outside a brokerage in Tokyo, Japan,

Asian shares on Wednesday followed in the footsteps of Wall Street, which pulled back overnight on disappointing earnings, while the dollar strengthened and oil prices extended this week’s losses.European markets were set for a similarly weak start, with financial spreadbetters expecting Britain’s FTSE 100 and France’s CAC 40 to open down about 0.4 percent, and Germany’s DAX to begin the day 0.2 percent lower.MSCI’s broadest index of Asia-Pacific shares outside Japan slid 0.7 percent.Japan’s Nikkei reversed earlier losses to close up 0.15 percent as the yen pulled back. South Korea’s KOSPI dropped 1.25 percent and Australia ended the day down 1.5 percent.China’s Shanghai Composite index pulled back 0.5 percent, while Hong Kong’s Hang Seng lost 0.8 percent.The declines are “mainly due to the soft lead from Wall Street,” said Shane Oliver, head of investment strategy at AMP Capital in Sydney. “Investors remain nervous given the U.S. election, (Federal Reserve) meetings, China property market etc.”U.S. stocks ended Tuesday down between 0.3 percent and 0.5 percent, as results and forecasts from companies in sectors including housing and consumer products missed expectations.Apple Inc. too dragged the market lower, as iPhone sales, which were better than expected, nevertheless continued a declining trend. The company also forecast slimmer-than-expected profit margins over the coming holiday season, even as it projected record sales.The U.S. declines followed a mixed performance in Europe on Tuesday. The broader European STOXX 600 fell 0.3 percent, with Germany flat after hitting its highest level this year, and France down 0.3 percent.British shares closed up 0.45 percent, as the pound slumped to as low as $1.2082, its weakest in 2 1/2 weeks, on comments by Bank of England Governor Mark Carney that there were limits to the central bank’s ability to ignore the effects of the currency’s slide on inflation.His comments, ahead of a policy meeting next week, stifled expectations for more monetary stimulus in Europe.On Wednesday, sterling retreated 0.2 percent to $1.2164.The euro, which slid to a 7 1/2-month low of $1.0851 on Tuesday, recovered to end the session flat, and was trading little changed at $1.0887 on Wednesday.With investors looking ahead to U.S. third-quarter gross domestic product data on Friday, the dollar index, which tracks the greenback against a basket of six global peers, gained 0.1 percent to 98.775.It hit its highest level since Feb. 1 on Tuesday as traders saw a better than 78 percent chance of an interest rise hike by the Federal Reserve in December, according to CME Group’s FedWatch tool.The dollar edged up 0.2 percent to 104.35 yen after touching the highest level in almost three months on Tuesday.The Australian dollar jumped 0.6 percent to $0.7689, its biggest increase in a week, after consumer prices rebounded by more than forecast in the third quarter, boosting bets the central bank will hold policy steady into next year.The stronger dollar and a report that showed U.S. inventories grew nearly three times as much as forecast weighed on oil prices.U.S. crude fell 1.3 percent to $49.29 a barrel, and down 3.1 percent this week.Brent futures retreated 1.2 percent to $50.20, bringing this week’s losses to 3.1 percent.“Basically, the glut continues and demand is not coming back,” said Phil Davis, a trader at PSW Investments in Woodland Park, New Jersey. “I don’t want to read too much into it but the fact of the matter is it certainly doesn’t support $50 oil.”

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