TOKYO, Dec 7 — Asian shares held close to a two-month low today as softer oil and copper as well as US policy uncertainty kept sentiment in check, while high-tech stocks struggled to recover after a searing selloff.
Investors are looking to the final tax legislation in the United States, where a potential US government shutdown looms if Congress fails to agree on a spending package. There are also fears of a violent backlash in the Middle East from President Donald Trump's recognition of Jerusalem as Israel's capital.
MSCI's broadest index of Asia-Pacific shares outside Japan was barely changed in early trade, still hovering near a two-month low touched the previous day. From its 10-year peak hit on Nov 23, it has slipped 4.6 per cent.
Japan's Nikkei gained 1.2 per cent after having suffered its biggest fall since late March yesterday.
MSCI's gauge of stocks across the globe hit a two-week low yesterday while Wall Street's benchmark S&P 500 index edged down for its fourth straight session of losses.
“I would say markets are going through a healthy correction after their rallies during the past three months, or six months. I don't think we need to panic,” said Hirokazu Kabeya, chief global strategist at Daiwa Securities.
A relentless selloff in US technology shares, which has pressured global equities in recent weeks, subsided somewhat with S&P technology shares bouncing slightly 0.75 per cent.
The energy sector dragged the US market lower overnight as oil prices dropped.
Oil prices flirted with two-week lows after its big fall yesterday, when a sharp rise in US inventories of refined fuel suggested demand may be flagging, while US crude production hit another weekly record.
US West Texas Intermediate crude futures traded at US$56.10 (RM227.62) per barrel, up 0.25 per cent in early Asian trade but not far off yesterday's low of US$55.87.
The price of copper, seen as barometer of global economic health because of its extensive industrial use, also fell sharply earlier this week, raising worries about the world growth outlook.
“When you look at growth in China's industrial output and copper price over the last 10 years, you could say that copper still looks a bit expensive. I wouldn't be surprised to see further drop in copper if investors grow wary of the possibility of slowdown in China's output,” said Makoto Noji, senior strategist at SMBC Nikko Securities.
Copper closed at US$6,550 a tonne yesterday, not far from its two-month low of US$6,507.5 touched on Tuesday.
In the currency market, the euro fetched US$1.1803, having slipped to a two-week low of US$1.1780 yesterday.
The US dollar eased to 112.27 yen, slipping further from Monday's high of 113.09, which was its highest level in more than two weeks.
Bitcoin soared to a new record high, rising to US$14,047 on cryptocurrency exchange Bitstamp.
On the other hand, silver extended its decline since late last month to hit a near five-month low of US$15.94 per ounce. — Reuters