ASIA MARKETS: Nikkei Slips Below 20,000, Aussie Stocks Also Fall On Weak Oil Prices

By Lucy Craymer Features Dow Jones Newswires

South Korea's Kospi bucks trend with 0.6% gain

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Australian and Japanese stocks again lagged behind other Asian equities on Friday, with oil's sharp overnight pullback putting pressure on those equities.

Underperformance has become the norm of late, with Japan's Nikkei Stock Average stalling just below 20,000, a level it hasn't reached since December 2015, and Australian equities hit by concerns about banks in the wake of a planned new tax on the country's biggest lenders.

Australia's S&P/ASX 200 closed down 0.6% amid broad weakness in commodities-focused companies, putting the index's May retreat at 3%. BHP Billiton (BHP.AU) , Woodside Petroleum (WPL.AU) and Fortescue Metals (FMG.AU) fell more than 2%.

The Nikkei was off 0.5%. The index hit session lows as afternoon trading began and a stronger yen weighed on Japanese stocks; the dollar has been sliding toward Yen111.50.

Oil fell nearly 5% overnight (http://www.marketwatch.com/story/oil-reverses-some-losses-as-investors-get-ready-for-opec-meeting-2017-05-25) even after the Organization of the Petroleum Exporting Countries did what many expected in extending its continuing production-cut deal by nine months. But the reductions won't be deepened, which some thought was possible and helped fuel some of crude's most-recent gains.

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"It was a case of buy the rumor and sell the fact," said Stuart Ive, private client manager at OM Financial in Wellington, New Zealand. He added, "What started as a trickle soon turned into an avalanche of selling."

Oil prices dropped further in midday Asian trading Friday. July Brent futures were recently down 0.5% at $51.21 a barrel. Despite the declines, oil is only back to levels seen in mid-May.

Commodity currencies were also under pressure in Asia following the weakness in assets like oil, iron ore and steel. Against the U.S. dollar, the Australian dollar fell 0.4%, while the New Zealand dollar was down 0.2%.

Meanwhile, stocks in Asia saw some support from overnight gains in U.S. consumer-discretionary names. Leading the way was electronics retailer Best Buy's (BBY) 21% post-earnings pop, that stock's largest since 2001. The S&P 500 on Thursday notched its 19th record closing high of the year (http://www.marketwatch.com/story/us-stocks-poised-for-6-wins-in-a-row-but-opec-lies-in-wait-2017-05-25). For all of 2016, there were 18.

Read:Best Buy is capitalizing on troubles at Sears and HHGregg in one particular category (http://www.marketwatch.com/story/best-buy-is-capitalizing-on-troubles-at-sears-and-hhgregg-in-one-particular-category-2017-05-25)

Samsung (005930.SE) rose 1.1% in Asian trading, helping lead Korea's Kospi Composite Index deeper into record territory. It was recently up 0.6%, putting its May climb near 7%. Samsung's 28% surge to start 2017 has been a big factor in Korea's stock-market outperformance.

Indexes in China and Hong Kong were little changed, while India's Sensex hit fresh record highs and Taiwan's Taiex--weighted heavily with companies that help make products and parts in the consumer-electronics space--slipped 0.3%, falling from its best levels since 2000.

(END) Dow Jones Newswires

May 26, 2017 02:04 ET (06:04 GMT)