(Bloomberg) -- Asian stocks outside Japan retreated from the highest level in a year, following declines in U.S. equities, as crude oil's decline drove energy and raw-materials producers lower.
The MSCI Asia Pacific Excluding Japan Index fell 0.3 percent to 446.99 as of 4:10 p.m. in Hong Kong, set to halt a five-day gain. Markets in Tokyo are shut for a holiday. Philippine stocks dropped the most among major Asian peers. Taiwanese equities sank on concern a strengthening local currency will weigh on electronics exports. Hong Kong stocks reached an eight-month high on speculation an exchange trading link with Shenzhen will start soon.
Thursday's retreat comes after the regional stock index climbed 25 percent from a January low, dismissing the effects of Britain's vote to leave the European Union as central banks unleash further monetary easing. Oil decreased for a third day as weekly government data showed U.S. crude stockpiles unexpectedly expanded.
“The biggest risk to the market at the moment is a huge drop in oil prices,” James Woods, a strategist at Rivkin Securities in Sydney, said by phone. “Recent gains, particularly in U.S. equities, are becoming exhausted. We'll see some near-term weakness in the coming weeks. Investors are likely to be buying on these dips as central bank policies remain supportive of equities.
Rate Cut
New Zealand 's central bank cut interest rates to a record low and flagged more easing to combat low inflation, disappointing some investors who were looking for a more aggressive signal. While policy makers around the world are engaged in unprecedented stimulus efforts, wagers on the Federal Reserve hiking borrowing costs this year linger below 50 percent.
South Korea's Kospi index added 0.2 percent. The nation's central bank held its key interest rate at a record low as board members defer further policy action until they have a clearer picture of the economy's path.
Taiwan's Taiex index decreased 0.8 percent, retreating from a one-year high. Technology shares including Taiwan Semiconductor Manufacturing Co. led Thursday's declines, with the chip supplier to Apple Inc. dropping 1.7 percent after reporting sales shrank last month.
Megaworld Tumbles
The Philippine Stock Exchange Index declined 0.9 percent as Megaworld Corp. tumbled the most since January after Credit Suisse Group AG cut its rating on the developer amid weakening housing sales. Australia's S&P/ASX 200 Index lost 0.6 percent and New Zealand's S&P/NZX 50 Index added 0.1 percent.
The Shanghai Composite Index slipped 0.5 percent. Investors are awaiting the release of Chinese data for July on industrial output, retail sales and fixed-asset investment due on Friday. Figures on money supply may be published as early as Thursday. Reports earlier this week showed that exports remained subdued while a decline in producer prices narrowed.
Hong Kong's Hang Seng Index climbed 0.4 percent as brokerages rallied, while the Hang Seng China Enterprises Index gained 1.2 percent. The exchange trading link with Shenzhen is "imminent," Hong Kong Exchanges & Clearing Ltd.'s Chief Executive Officer Charles Li told CNBC in an interview. The exchange said in a statement it has no information on the approval timetable of the stock connect.
Slower Growth
Singapore's Straits Times Index slipped 0.2 percent, paring earlier losses of as much as 0.8 percent, as oil-rig builder Sembcorp Marine Ltd. led gains with a 4.2 percent surge that prompted a query from the city's bourse. The island nation cut the top end of its 2016 growth forecast after the economy expanded less than previously estimated in the second quarter, underscoring a weakening global environment.
Santos Ltd. dropped 2.8 percent in Sydney, pacing losses among energy producers. AMP Ltd., an Australian fund manager and insurer, fell 3.8 percent in Sydney as Westpac Banking Corp. and Commonwealth Bank of Australia reported rising insurance claims.
Futures on the S&P 500 Index were little changed. The U.S. equity benchmark index lost 0.3 percent on Wednesday, retreating after the measure closed a point from an all-time high, as energy producers tumbled after crude oil slumped.
West Texas Intermediate crude futures slipped 1 percent in Thursday trading, after declining 2.5 percent on Wednesday.
To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net. To contact the editors responsible for this story: Jeff Sutherland at jsutherlan13@bloomberg.net, Chan Tien Hin, Andrew Janes
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