TOKYO: Asian shares dropped on Monday, dragged down by tumbling crude oil futures after producers' weekend talks failed to address the global supply glut.
Some 18 oil exporting nations had gathered in the Qatari capital of Doha to try to agree to stabilize output at January levels until October 2016. The pact fell apart after Saudi Arabia demanded that Iran join in.
Brent crude futures
"Given the strong correlation between the oil price and equities, Asian markets are not looking like they will have a good start to the week," said wrote Angus Nicholson, market analyst at IG in Melbourne.
"Commodities are likely to drive the pullback in equities today, with materials and energy stocks in for a difficult session," Nicholson said. "We will quite likely see credit spreads widen again today, as the oil price has been a major driver for high yield credit."
MSCI's broadest index of Asia-Pacific shares outside Japan was 0.6 percent lower in early trade.
S&P 500 e-mini futures
The Nikkei stock index fell 3.2 percent, as investors weighed the impact of devastating earthquakes in western Japan's Kyushu on manufacturers' supply chains.
A 7.3 magnitude tremor struck early on Saturday, following a smaller temblor on Thursday, centered in the region's Kumamoto prefecture, an important manufacturing hub.
The plunge in crude oil prices took a large slice out of commodity currencies.
The greenback gained 1.2 percent against the Canadian dollar to C$1.2969
The Japanese yen, a perceived safe-haven, benefited from the turmoil, with the dollar skidding 0.6 percent to 108.07 yen
The euro was down 0.4 percent at 122.10 yen
The euro edged up about 0.2 percent to $1.1300
Already a subscriber? Log in.
Limited time offer:
Cancel anytime. No ads. Auto-renewal. Unlimited access to the web and app. Personalised features. Members rewards.
Follow us on our official WhatsApp channel for breaking news alerts and key updates!