Japan's Nikkei 225 falls in early trade while Australian shares bounce back

  • Asia-Pacific shares traded mixed on Thursday, following overnight losses on Wall Street.
  • Japan's Nikkei 225 extended losses from the previous session — the benchmark index was down 0.43% while the Topix fell 0.28%.
  • In Australia, the ASX 200 retraced early losses to trade up 0.2%, but the energy sector remained under pressure amid an overnight sell-off in crude futures.

SINGAPORE — Asia-Pacific shares traded mixed on Thursday, following overnight losses on Wall Street.

Japan's Nikkei 225 extended losses from the previous session — the benchmark index was down 0.43% while the Topix fell 0.28%.

In Australia, the ASX 200 retraced early losses to trade up 0.2%. But the energy sector remained under pressure amid an overnight sell-off in crude futures. Oil plays like Santos, Oil Search and Woodside Petroleum fell between 0.88% to 1.43%.

The country's so-called Big Four banks traded mixed, reducing some of their earlier losses: Shares of ANZ were down 0.07%, Commonwealth Bank rose 0.13%, Westpac lost 0.27% and the National Australia Bank was near flat.

"Equities were soft overnight on inflation concerns, as UK inflation came in stronger than expected and supply constraints weighed on housing starts in the US," analysts at ANZ Research said in a morning note.

The U.K.'s Consumer Price Index rose by 4.2% in the 12 months to October, up from 3.1% in September and beating economists' expectations of 3.9%.

Wednesday's data is expected to add pressure on the Bank of England to act on interest rates at its December meeting. The central bank held rates steady in November, defying many investors' expectations that it would be the first major central bank to hike rates following the coronavirus pandemic.

Crude prices down

Oil prices declined in the previous session amid growing concerns about oversupply and a recovery in demand.

Brent crude futures fell 2.6% to $80.28 a barrel Wednesday while U.S. West Texas Intermediate (WTI) crude futures settled 3% lower at $78.36.

"The release of the weekly (U.S. Energy Information Administration) report showing a large fall in inventories did little to stop the selling," ANZ Research analysts wrote Thursday.

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"This may be due to the bearish tone that both the IEA and OPEC set earlier this week in their monthly oil market reports. Both expect the market to move into surplus in the not too distant future," they added.

President Joe Biden's administration has also asked some of the world's largest oil-consuming countries to consider releasing some of their crude reserves to coordinate efforts to push prices lower and help with economic recovery, according to media reports.

Elsewhere, in the currency market, the U.S. dollar last traded at 95.828 against a basket of its peers — the dollar index climbed from levels below 95.200 in the previous week.

The Japanese yen changed hands at 114.15 per dollar while the Australian dollar traded near flat at $0.7268.

CNBC's Matt Clinch contributed to this report.

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