Asian shares sagged Tuesday as oil prices gave up overnight gains. A weaker dollar weighed on Japanese stocks following the release of revised data showing Japan’s economy contracted in October-December.
Japan’s benchmark Nikkei 225 dropped 0.8 percent to 16,783.15 and South Korea’s Kospi lost 0.6 percent to 1,946.12. Hong Kong’s Hang Seng index shed 0.7 percent to 20,021.30, while the Shanghai Composite slipped 0.8 percent to 2,874.60. Australia’s S&P/ASX 200 fell 0.7 percent to 5,108.00, and other regional stocks also declined.
Revised data showed Japan’s GDP contracted at a 1.1 percent annualized pace in the last quarter, compared to a 1.4 percent expansion in the July-September quarter. It was a modest improvement over the previous estimate of a 1.4 percent contraction in October-December.
“To be sure, Japan’s economy fared better in Q4 than preliminary data suggested,” said Vishnu Varathan, of Singapore Treasury Division at Mizuho Bank. “All said, reviving growth is still the main policy challenge for the Abe administration and the BOJ,” he said, referring to Prime Minister Shinzo Abe and the Bank of Japan, which has implemented negative interest rates to encourage growth.
Investors appeared skeptical over Monday’s rally in oil, iron ore and other commodities, analysts said. Prices fell back slightly during Asian trading after a 5.5 percent jump in U.S. crude prices overnight.
Wall Street managed to eke out only modest gains after wavering through the day. The Dow Jones industrial average rose 67.18 points, or 0.4 percent, to 17,073.95. The S&P 500 edged up 1.77 points to 2,001.76. The Nasdaq composite, which is heavily weighted with technology stocks, gave up 8.77 points, or 0.2 percent, to 4,708.25.
Benchmark U.S. crude fell 42 cents to $37.48 a barrel on the New York Mercantile Exchange. It jumped $1.98 on Monday to $37.90 a barrel. Brent crude, which is used to price international oils, fell 54 cents to $40.30 a barrel.
The euro was little changed at $1.1019, up from $1.1013. The dollar edged down to 113.13 yen from 113.27 yen.