SINGAPORE: Asian stocks advanced on Thursday as oil prices inched up after hitting a 10-month low overnight on concerns over a supply glut and falling demand, dragging U.S. and European shares lower.
MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.2 percent.
Japan's Nikkei and South Korea's KOSPI were flat, while Australian shares rose0.4 percent.
Crude oil crept up from multi-month lows hit on Wednesday on concerns over growing U.S. production and reduced Chinese refinery activity.
"The time for contrarian trades in oil is fast approaching, but I would want to see some stability in price and the technicals start to become more convincing," said Chris Weston, chief market strategist at IG in Melbourne.
U.S. crude futures
Global benchmark Brent
The resulting decline in oil stocks hit stocks in Europe and on Wall Street overnight.
Britain's FTSE <.FTSE>, Germany's DAX <.GDAXI> and France's CAC 40 <.FCHI> closed between 0.3 percent and 0.4 percent lower.
The Dow Jones Industrial Average <.DJI> closed down 0.3 percent, while the S&P 500 <.SPX> was slightly lower. Nasdaq <.IXIC> closed up 0.7 percent, lifted by biotech stocks.
Financial stocks also contributed to losses on Wall Street, driven lower by a drop in the Treasury yield curve to its flattest in almost a decade, as investors tried to reconcile a hawkish Federal Reserve with deteriorating inflation measures.
Boston Fed President Eric Rosengren and Fed Vice Chair Stanley Fischer suggested they are concerned less about raising rates too fast or too high than about keeping them too low for too long.
“I think the market may be pricing in a little higher odds of another rate hike before the end of the year, and that is helping drive some of the flattening,” said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York.
The yield curve between five-year notes and 30-year bonds
The dollar was marginally lower on Thursday. The dollar index <.DXY> was at 97.523, following Wednesday's 0.2 percent loss.
The greenback bought 111.41 yen
Sterling
The euro
Spot gold
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