Asian stock markets mostly fell Wednesday as oil's fall to a three-year low weighed on energy companies and weaker European growth forecasts dampened sentiment.
KEEPING SCORE: Hong Kong's Hang Seng fell 0.6 percent to 23,715.82 and South Korea's Kospi was down 0.2 percent to 1,931.43. Australia's S&P/ASX 200 was nearly flat at 5,517.90. Markets in mainland China and Taiwan also fell while Singapore and Indonesia were slightly higher. Japan's Nikkei 225 erased losses in the afternoon, finishing up 0.4 percent at 16,937.32. Chinese state oil giant PetroChina Co. fell 2 percent and China Petroleum & Chemical Corp., also known as Sinopec, fell nearly 2 percent. Japanese petroleum and metals company JX Holdings Inc. shed 3 percent.
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OIL SLUMP: Benchmark U.S. crude hit a fresh three-year low at $77.05 a barrel, down 14 cents. The contract fell $1.59 to $77.19 on Tuesday. Oil prices have been in slump since the summer and the price of oil fell further Tuesday after Saudi Arabia decided to sell its oil at bargain prices to the U.S. in a bid to maintain its market share amid a boom in U.S. production. Lower oil prices are a double-edge sword for Asia. They could add to deflationary pressures in Japan and also serve as a reminder of weak global demand. But lower fuel costs could also increase disposable income.
EU GROWTH: The European Union cut its already low economic growth forecasts further on Tuesday to 0.8 percent for this year from a prediction of 1.2 percent made in the spring. Next year's growth forecast for the 18 country euro currency bloc was reduced from 1.7 percent to 1.1 percent. German Chancellor Angela Markel said the situation in the euro zone is "extremely fragile." Unemployment in the European Union is expected to decrease, but at a painfully slow rate.
THE QUOTE: "News that the EU has downgraded forecasts for euro zone growth is not a great surprise to markets given the tendency for forecasts to follow the economy lower," said Ric Spooner, chief market analyst at CMC Markets. "Even so, it reinforces expectations of a low to moderate global growth outlook with downside risk to inflation."
SOFTBANK SLIDE: Shares of Japanese telecommunications and internet company Softbank fell 2.3 percent in Tokyo after its quarterly financial report showed that its recent acquisition of U.S. carrier Sprint Corp. would weigh on its operating earnings. Sprint is eliminating 2,000 jobs, or about 5 percent of its staff, to cut $1.5 billion in annual spending. It reported a reported a $765 million loss last quarter.
WALL STREET: U.S. markets closed lower as energy stocks lost ground because of the falling oil price. The Standard & Poor's 500 fell 0.3 percent to 2,012.10. The Nasdaq composite dropped 0.3 percent to 4,623.64. The Dow Jones industrial average bucked the trend, edging up 0.1 percent to 17,383.84.
CURRENCIES: The dollar rose to 114.16 yen from 113.69 yen late Tuesday to another fresh high. The euro fell to $1.2534 from $1.2548.