Asian shares subdued as oil prices slump

A man walks past a screen displaying the Nikkei average outside a brokerage in Tokyo, Japan, on June 24.
A man walks past a screen displaying the Nikkei average outside a brokerage in Tokyo, Japan, on June 24. PHOTO: REUTERS

TOKYO (REUTERS) - Asian shares edged lower in early trading on Tuesday (Aug 2), taking their cues from a modestly lower day on Wall Street as US crude oil prices slid.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.2 per cent in early trading. The S&P 500 had hit an intraday record high overnight, but was unable to hold gains.

Hong Kong was bracing for Typhoon Nida, shutting down most of the financial hub.

Japan's Nikkei stock index slipped 0.8 per cent in early trade, as the US dollar edged lower against the yen.

Prime Minister Shinzo Abe's cabinet is likely to approve a 28 trillion yen (S$360 billion) stimulus package on Tuesday, though direct fiscal spending will total only about 7 trillion yen, according to two people briefed on the matter.

Australian shares were 0.1 per cent lower.

The Reserve Bank of Australia's policy board will decide on Tuesday whether rates should be left at 1.75 per cent or trimmed a quarter point to a new record low, with most analysts predicting the need to combat low inflation and a rising currency will win the argument for more stimulus.

The US dollar was down 0.1 per cent at 102.31 yen, while the euro was 0.1 per cent higher at US$1.1172.

The dollar index, which tracks the US currency against a basket of six major peers, was steady at 95.711, holding above Friday's 95.384, its lowest since July 5.

US crude oil edged up 0.3 per cent to US$40.18 a barrel, after shedding 3.7 per cent on Monday, while Brent crude was 0.5 per cent higher at US$42.35 after closing down 3.2 per cent.

US crude tumbled below US$40 per barrel on Monday for the first time since April, on heightened worries of a supply glut despite peak summer gasoline demand.