Most Asian shares declined on Monday in late morning trade fell as crude extended gains and tested nine-month highs on fears the insurgency in Iraq could worsen and affect oil exports.
The MSCI Asia Pacific Index lost 0.2% to 144 as of 9:37 a.m. in Hong Kong. Japan’s Topix index slid 0.4% and South Korea’s Kospi index retreated 0.1%. Australia’s S&P/ASX 200 Index slipped 0.3% and New Zealand’s NZX 50 Index lost 0.1%.
Hong Kong’s Hang Seng Index retreated 0.2%, while Taiwan’s Taiex Index and Singapore’s Straits Times Index both sank 0.1%. China’s Shanghai Composite Index added 0.1%.
An escalation of violence in the Middle East pushed oil prices higher and contributed to declines in Asia-Pacific equities on the final two trading days last week. Army troops killed more than 270 rebels yesterday in Iraq, OPEC’s second-biggest crude producer, as the prospect of civil war intensifies with Sunni Muslim insurgents controlling territory north of Baghdad.
Brent LCOc1 rose about 0.6% to $113.20 per barrel, after touching $114.69 on Friday, its highest since September.
In corporate news, Korean Air Lines Co. sank 1.9%, pacing a retreat among industrial firms as Brent crude oil prices advanced.
Panasonic Corp. led consumer shares lower, dropping 1.2% in Tokyo.
Echo Entertainment Group Ltd. surged 7.9% in Sydney after the casino operator said its profit forecast is above market expectations.
Investors will be focusing on the US Federal Reserve this week, which will conclude a policy meeting on Wednesday. Markets will be watching for any signals on when the US central bank might begin increasing interest rates.