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|A man stands next to a stock indicator showing stock prices of Japanese companies listed on the Tokyo Stock Exchange. (Photo: Martin Bureau/AFP)|
Both main crude contracts piled higher after the State Department warned US allies they would be hit with sanctions if they did not halt Iran oil purchases by Nov 4.
Analysts said that while the announcement was not unexpected, the mere confirmation of the fact was enough to push investors into buying mode.
The commodity has enjoyed a healthy run since the weekend, when OPEC and Russia agreed to a moderate lift in their 18-month-old output ceiling.
Unrest in producer Libya was also providing support.
The higher oil prices - Brent added more than two per cent and WTI more than three per cent on Tuesday - lifted energy firms. CNOOC soared more than three per cent in Hong Kong while PetroChina added 0.4 per cent. Woodside Petroleum in Sydney added 1.4 per cent, while Tokyo-listed Inpex climbed 1.5 per cent and JXTG soared more than six per cent.
However, trade tensions continue to loom large, with investors on edge awaiting the next developments.
Tokyo ended 0.3 per cent lower. Hong Kong lost 1.8 per cent and Shanghai closed 1.1 per cent down, with the mainland Chinese index now in bear market territory - down 20 per cent from its recent highs.
Seoul edged 0.4 per cent down, while Singapore shed 0.8 per cent and Sydney was marginally lower. Taipei and Mumbai fell but Wellington, Manila, Bangkok and Jakarta were up.
Stephen Innes, head of Asia-Pacific trading at OANDA, said Donald Trump's attack on Harley-Davidson indicated he is not ready to back down on his hardline protectionist America first agenda.
'NO ONE IS SAFE'
The president on Tuesday hit out at the motorbike maker after it said it was planning to shift some manufacturing overseas because of European Union tariffs put in place as retaliation for US duties.
He said the bikes should "never" be built outside the United States, and tweeted: "Harley must know that they won't be able to sell back into US without paying a big tax!"
In a commentary, Innes said: "The only thing I can think of that is more iconic Americana than apple pie is Harley-Davidson.
"So, after the president's recent Twitter tirade directed at the iconic motorcycle manufacturer, it cements the view that, friend or foe, no one is safe from the wrath of the US administration's America First trade policy."
He added that, while the US economy remains in rude health, which should provide equities support, "investors are caught between a hammer and anvil on escalating trade wars".
On currency markets, the trade uncertainty is pushing the dollar up against most high-yielding units owing to its safe haven status, though it weakened against the yen, euro and pound.
The Chinese yuan also fell and is coming under increasing pressure owing to concerns about the impact of a trade war on the world's number two economy, which is also showing signs of weakness.
The People's Bank of China at the weekend lowered lenders' reserve requirements in a bid to free up cash but while it was welcomed it added to the yuan's weakness and fuelled a sense of unease in the economic outlook.
Markets are keeping an eye on US durable goods orders later Wednesday "with some interest here in whether the concerns being flagged by various Fed officials about trade worries leading to deferred investment and hiring decisions are showing up in orders," Ray Attrill, head of forex strategy at National Australia Bank, said.
In early trade London rose 0.3 per cent, Paris was flat and Frankfurt edged up 0.1 per cent.
- Key figures around 0810 GMT -
Tokyo - Nikkei 225: DOWN 0.3 per cent at 22,271.77 (close)
Hong Kong - Hang Seng: DOWN 1.8 per cent at 28,356.26 (close)
Shanghai - Composite: DOWN 1.1 per cent at 2,813.18 (close)
London - FTSE 100: UP 0.3 per cent at 7,557.50
Euro/dollar: UP at US$1.1645 from US$1.1600 at 2100 GMT
Pound/dollar: UP at US$1.3205 from US$1.3200
Dollar/yen: DOWN at ¥109.72 from ¥110.08
Oil - West Texas Intermediate: UP 31 cents at US$70.84
Oil - Brent Crude: UP 33 cents at US$76.64 per barrel
New York - Dow Jones: UP 0.1 per cent at 24,283.11 (close)