Asian stocks mostly down despite oil price retreat

Asian shares were mostly lower Wednesday, with China's benchmark index dropping to a 20-month low, although shares rebounded in Japan as investors took heart from falling oil prices and chased gains in the auto sector.

Tokyo's Nikkei 225 index gained 0.64 percent to 12,689.59 after losing nearly 2 percent the day before following the surprise resignation of Prime Minister Yasuo Fukuda.

"Investors bought back shares as sentiment turned positive on falling oil prices," said Kazuhiro Takahashi, a strategist at Daiwa Securities SMBC Co. Ltd.

In Japan, top automaker Toyota Motor Corp. rose 2.1 percent, Nissan Motor Co. added 2.4 percent and Honda Motor Co. jumped 5.1 percent.

Share prices also bounced back in South Korea, where the KOSPI gained 1.4 percent after sinking to its lowest level in over a year earlier in the week on worries over the country's weakening currency.

In Thailand, the SET Index fell 1.4 percent to 649.93 amid mounting political unrest a day after the prime minister imposed emergency rule on the country.

Meanwhile across most of the region, weakening oil prices reinforced fears that a weakening world economy will slow global demand for raw materials.

Oil prices dropped as low as $107.32 a barrel late Wednesday afternoon in Asia.

China's benchmark Shanghai Composite Index fell 1.2 percent to 2,276.67, with most sectors except airlines seeing moderate losses.

China Shenhua Energy, the country's biggest coal miner, fell 5.6 percent, while Zhongjin Gold dropped 6.9 percent.

Financials and property firms also declined, with Poly Real Estate Group Co. losing 2.3 percent and Shanghai Pudong Development Bank off 4.4 percent.

In Hong Kong, the Hang Seng index fell 2.17 percent to 20,585.06.

Ernie Hon, a strategist at ICEA Securities, said he expected the Hong Kong market to remain bearish in the near term as investors avoid stocks and turn instead to more stable investments such as bonds.

"We have to wait until the U.S. recovers before the Hong Kong market can rebound," Hon said.

Among the worst hit was upstream oil producer CNOOC Ltd., which lost 6 percent, while PetroChina slid 3.2 percent and Aluminum Corp. of China, or Chalco, tumbled 6.4 percent.

Ocean shipping company China COSCO Holdings fell 9.5 percent.

But Huiyuan Juice Group Ltd. jumped 164.3 percent, to 10.94 Hong Kong dollars after Coca-Cola Co. made a $2.5 billion bid for the major juicemaker, offering to buy its shares at almost triple their previous closing price.

Elsewhere in the region, Australia's S&P/ASX200 fell 1.1 percent, Jakarta's Composite index lost 2 percent and Taiwan's benchmark lost 1.7 percent.

In currencies, the dollar was trading at 108.89 yen Wednesday afternoon in Asia, up from 108.06 yen Tuesday, while the euro was quoted at $1.4415 from $1.4518 late Tuesday in New York.

Financial markets in India were closed for a national holiday.

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AP reporters Shino Yuasa in Tokyo and Dikky Sinn in Hong Kong contributed to this report.