Asian stocks were listless on Wednesday following President Donald Trump’s announcement that the U.S. would pull out of the Iran nuclear deal, with most markets posting slight declines in morning trade.
Japan’s Nikkei 225 declined 0.37 percent, as most sectors traded in negative territory, although gains were seen in the oil and mining sectors.
Elsewhere, South Korea’s benchmark Kospi edged down by 0.14 percent. Despite the index’s overall decline, gains were still seen in petroleum refiners, with S-Oil and SK Innovation up 1.42 percent and 1 percent, respectively.
Greater China markets searched for direction. Hong Kong’s Hang Seng Index hovered around the flat line, last inching higher by 0.01 percent. Amid the sideways trade, the energy sector was up 1.49 percent in the morning as CNOOC rose 1.66 percent.
Mainland markets traded slightly lower. The Shanghai composite slipped 0.21 percent and the Shenzhen composite eased by around the same level.
Down Under, the S&P/ASX 200 tacked on 0.17 percent as declines in the heavily weighted financials subindex were offset by gains seen in most other sectors. The energy subindex rose 0.85 percent in early trade as oil producers advanced, with Woodside Petroleum up 0.63 percent.
MSCI’s broad index of shares in Asia Pacific excluding Japan slipped 0.13 percent in Asia morning trade.
Trump on Tuesday delivered on a pledge made during his election campaign to withdraw the U.S. from the 2015 Iran agreement, announcing that broad sanctions would be reimposed on the country.
The landmark accord, which European nations including Germany and France are also party to, lifted international sanctions on Iran in exchange for the country curbing its nuclear program. Iran says it will stay committed to the agreement and will continue negotiating with other parties to the deal, Reuters reported.
“It is still not known [what] the wider implications of the U.S. pulling out mean for the deal,” said ANZ analysts, adding that Trump’s announcement “puts into place a scenario that could see the crude oil market tighten significantly” in the second half of this year and into 2019.
Oil gained on Wednesday: U.S. West Texas Intermediate rose 2.29 percent to trade at $70.64 per barrel. U.S. crude futures had crossed the $70 level for the first time since end-2014 on Monday. Brent crude futures were up 2.43 percent at $76.67.
Prices had declined in the last session although they settled above their session lows following Trump’s announcement. Analysts said the decision had mostly been priced in by markets beforehand, with oil prices recently buoyed by concerns over the impact that renewed U.S. sanctions on Iran would have on the latter’s oil exports.
The slight declines seen in Asia also came on the back of U.S. stocks finishing little changed on the back of Trump’s announcement, with the Dow Jones industrial average closing up 0.01 percent and the S&P 500 ending lower by 0.03 percent.
Corporates in the region that are slated to release full-year results on Wednesday include Toyota, SoftBank Group and Mitsubishi Motors. Hong Kong Exchanges and Clearing and South Korea’s AmorePacific will announce first-quarter earnings later in the day.
In currencies, the dollar extended its gains against a basket of currencies. The dollar index traded at 93.221 at 9:30 a.m. HK/SIN after rising to its strongest level in 2018 on Tuesday.
Against the yen, the dollar strengthened some 0.4 percent to trade at 109.59. The Australian dollar, meanwhile, slipped to trade at $0.7425 amid broader strength in the dollar.
