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Japan leads mostly lower open in Asia stock markets

CNBC logo CNBC 10-08-2016 Saheli Roy Choudhury

Japanese shares led losses across a mostly lower open in Asia on Wednesday, with sentiment likely be driven by movements in oil prices and in anticipation of Chinese data due later this week. 

In Australia, the ASX 200 (.AXJO) slipped 0.25 percent in early trade, with declines in most sectors. Japan's Nikkei 225 (.N225) was down 0.48 percent, while the Topix (.SPTPXN) was down 0.59 percent.

South Korean shares bucked the trend, with the Kospi (.KS11) up 0.12 percent.

U.S. stocks ended slightly higher Tuesday, with the Nasdaq (.IXIC) composite posting a fresh record close at 5,225.48, while the Dow Jones industrial average (.DJI) and the S&P 500 (.SPX) finished near flat.

"It's a slow grind in markets at present, which will please many in the investment community but frustrate the day traders out there," said Chris Weston, chief market strategist at brokerage firm IG. 

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Aside from developments stateside in the U.S. presidential election campaigns, Weston said issues that traders would likely have on their watch list included the dollar, oil prices and the London Interbank Offered Rate (Libor), the benchmark interest rate used by many banks to offer short-term loans to one another .

"However, these markets are not at levels likely to to cause any real anxiety in broader risk sentiment," he added.

Oil prices pulled back on Tuesday after advancing nearly 3 percent on Monday amid news of a September meeting among OPEC members.

The drop in prices reflected a surprise build up in U.S. crude stockpiles last week. Reuters reported that preliminary data from the American Petroleum Institute showed U.S. crude stockpiles rose by 2.1 million barrels during the week to August 5, when analysts had expected a 1 million-barrel drawdown.

U.S. crude futures fell 0.6 percent to $42.77 a barrel, while global benchmark Brent shed near 1 percent to $44.98.

In Japan on Wednesday, data showed machinery orders rose more than expected in June, a sign companies were more willing to increase their capital expenditure, according to Reuters.

Core orders for June were up 8.3 percent on-month compared to a median forecast that predicted a 3.1 percent increase, Reuters reported. Manufacturers' orders rose 17.7 percent while orders from the services sector was up 2.1 percent.

The better-than-expected data failed to give stocks a leg-up in Japan as a relatively stronger yen weighed. The Japanese currency traded at 101.59 against the dollar in early morning trade on Wednesday, compared to levels over 102.2 earlier in the week.

Japanese export stocks traded mostly lower, with Toyota (7203.T-JP) down 0.55 percent, Honda (7267.T-JP) down 0.94 percent while Nissan (7201.T-JP) shares added 0.15 percent.

In earnings news, Australia's biggest bank, the Commonwealth Bank of Australia (CBA'A-AU) (CBA), said its cash profits rose 3 percent for full-year 2016 to 9.45 billion Australian dollars ($7.26 billion). The bank announced a final dividend of A$2.22 per share.

Early reactions to CBA shares were muted, with the stock up only 0.11 percent.

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