Most of the Asian indices gave up their early gains to slip into the red as a retreat in crude-oil prices hurt energy stocks in Tokyo, Sydney and in Hong Kong.
Oil continued to fall following Tuesday`s sell-off as investors took profits after last week`s record highs and amid fears over slowing crude demand from the world`s biggest energy consumer, the U.S.
The high prices at the pump may curb U.S. consumers` demand for gasoline going into the usually peak-demand summer driving season. Figures released Tuesday show U.S. consumer confidence has dipped to its lowest level since 1992.
Signs are also emerging that high prices are starting to affect demand in Europe and key emerging Asian economies.
The crude oil prices, which touched a record high of $135.09 a barrel last week, dropped in electronic trading after profit-taking dragged the front-month July contract $3.34 down to $128.85 a barrel in a regular session overnight on the New York Mercantile Exchange. At 9:41 a.m., New York-traded West Texas Intermediate crude for July delivery was down $1.74 at $127.13 a barrel. In London, Brent crude for July delivery was down $1.41 at $126.90 a barrel, having hit a record high of $135.14 last week.
The Asian markets, the Nikkei 225 Average dropped 1.3% to 13,709.44 and the broader Topix index fell 1.4% to 1,348.69, unable to sustain early gains.
In Sydney, the S&P/ASX 200 shed 1.2% to 5,648.10. On the economic front, the Westpac-Melbourne Institute leading index of economic activity growth rate, which indicates the likely pace of Australian economic activity three to nine months into the future, fell to an annualized rate of 3.3% in March from 3.6 % in February.
In March the index`s growth rate was at the lowest level since March 2004 and was well below the trend growth rate of 4.4 %.
The coincident index, which measures current activity, recorded an annualized growth rate of 3.4 % in March, down from 3.8 % in February and below the annualized trend growth rate of 3.8%.
Westpac expects domestic spending growth to fall from 5.7% in 2007 to 2.7 % in 2008 and only 2.1% in 2009.
In Hong Kong, the benchmark Hang Seng Index recently slipped 0.1% to 24,249.51, after rising as high as 24,321.89 earlier in the day, while the Hang Seng China Enterprises Index was up by 0.3% at 13,374.74.
China`s Shanghai Composite gained further shooting up by 2.5% to 3,459.03 while the Shenzhen Composite added 2.5% reaching 1,056.54 levels.
Elsewhere, New Zealand`s NZX 50 index was little changed at 3,547.01 and South Korea`s Kospi gave up early advances to drop 1.1% to 1,805.64.
Singapore`s Straits Times Index inched up 0.6% to 3,133.30 and Taiwan`s weighted index lost 1.3% to 8,665.73. Malaysia`s KLSE Composite fell by 1.1% to 1,260.58 while the Thailand`s SET tumbled by 2.5%.
In the afternoon trading India`s Sensitive Index, or Sensex, was up by 1.2% to 16,462.60 and the broader S&P/CNX Nifty inch upward by 1% to 4,906.35.
In currencies, the yen was changing hands at 104.01 against the U.S. dollar, compared to 104.24 in late New York.
On Wall Street the markets resume on a positive note after the extended holiday. The Dow Jones Industrial Average climbed 68.72 points to 12,548.35 and the Nasdaq Composite added 36.57 points to 2,481.24, while the S&P 500 index gained 9.42 points to 1,385.35.
European shares edged higher today morning as the crude oil continued its retreat touching $127 level. Of the national indices, the U.K. FTSE 100 index rose 0.4% to 6,085.20, the German DAX 30 index climbed 0.3% to 6,978.61 and the French CAC-40 index advanced 0.4% to 4,927.25
On the economic front, the current account for Euro Zone has posted a EUR15.3 billion deficit in March, from a EUR7.5 billion surplus in February.
February`s surplus has been revised up from the 4.3 billion surplus initially estimated. Net direct investment in the Euro Area was -EUR18.8B, from -20.0 billion in February. Net portfolio plunged to EUR1.3B in March from EUR19.4B in February
German April import prices rose 0.9 percent from March and were up 5.7 percent compared with April last year, driven by higher fuel costs. In another data release a composite indicator of French consumer confidence fell to -41 in May from -38 in April