Asian markets trade mixed, with oil prices on the back foot

Asian markets were mixed in early Monday trade, with the decline in oil prices weighing on energy stocks in the region, while investors digested weekend news regarding U.S.-North Korea relations.

Japan’s Nikkei 225 advanced 0.32 percent and the broader Topix added 0.19 percent. The Topix oil subindex fell 2.76 percent amid weakness in oil prices, but those losses were offset by gains in the real estate, utilities and technology sectors.

In South Korea, the Kospi rose 0.66 percent as steelmakers and other manufacturing names advanced: Posco gained 3.18 percent and Hyundai Steel jumped 13.8 percent. Large cap technology names traded slightly lower in the early going.

Meanwhile, Australia’s S&P/ASX 200 edged lower by 0.21 percent as declines in energy and materials weighed on the broader index. Mining major BHP fell 2.3 percent and Woodside Petroleum slid 2.75 percent.

MSCI’s broad index of shares in Asia Pacific excluding Japan was little changed in the morning, last eking out a gain of 0.04 percent.

On the corporate front, Malaysia’s Maybank is expected to release first-quarter earnings later in the day.

The mixed trade in Asia followed the mostly lower close stateside on Friday amid a mix of positive corporate earnings releases and geopolitical headlines involving North Korea.

The Dow Jones industrial average slipped 0.24 percent and the S&P 500 edged down by 0.24 percent as financial and energy sector stocks continued to contribute to overall losses.

Oil prices were on the back foot after coming under pressure last week following news that top producers could ease quotas on existing production cuts. Brent crude futures slipped 0.59 percent to trade at $75.99 per barrel and U.S. West Texas Intermediate eased 0.77 percent to trade at $67.36 after settling 4 percent lower in the last session.

On the geopolitical front, delegations from the U.S. and North Korea met on Sunday at the border between North and South Korea. The talks followed a Saturday meeting between South Korean President Moon Jae-in and North Korean leader Kim Jong Un.

Trump said he canceled a planned meeting with Kim in June last Thursday, although the White House later said it was still making preparations “should the summit take place.”

Meanwhile, the euro firmed by some 0.3 percent after news that Italy’s president had not approved a nominee for the position of economy minister. The common currency traded at $1.1685 at 8:02 a.m. HK/SIN, compared to Friday’s close of $1.1650.

The dollar index, which tracks the greenback against several peers, stood at 94.101. Against the yen, the dollar fetched 109.59.

There aren’t many data releases from the region expected on Monday, with just Hong Kong April trade data expected at 4:30 p.m. HK/SIN. Looking ahead, China is expected to release official Purchasing Managers’ Index data on Thursday.

Meanwhile, markets in the U.S. and U.K. will be closed on Monday for holidays.

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