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Asia stocks fall, oil prices rally

  • Story Highlights
  • Japan's Nikkei slides 0.9 percent to close at lowest level in almost two months
  • Australia benchmark down more than 1 percent down
  • South Korea's KOSPI slides 2 percent, biggest loss in more than four months
  • Taiwan falls 1.8 percent, Singapore loses 1.2 percent
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SINGAPORE (Reuters) -- Asian shares fell on Thursday, unnerved by earnings setbacks, election jitters in Japan and inflation fears in Australia, while the dollar held onto gains and oil prices rallied.


South Korea's benchmark KOSPI slid 2 percent, its biggest loss in more than four months.

The dollar was steady after Wednesday's hefty gains, hovering above its record low against the euro and a 2-1/2-month low against the yen, after traders decided its earlier sharp sell-off had already fully accounted for concerns about housing-market weakness.

U.S. oil prices crept up further after they surged more than 3 percent on Wednesday on news of a drop in crude inventories.

The oil rally and a deluge of earnings lifted heavyweight European energy stocks and other blue chips after two days of losses. Britain's FTSE 100 index was up 7 points in opening trade.

But gains in energy related companies and a modest Wall Street rebound failed to prevent a broad market retreat in Asia.

Japan's Nikkei slid 0.9 percent to close at its lowest level in almost two months.

Investors punished Advantest, which fell 5 percent after the maker of chip testing devices reported lower quarterly profit, but caution ahead of upper house elections on Sunday also soured sentiment.

In Australia, speculation interest rates will rise to curb inflation hit banks, while falling metals prices hurt miners, knocking the benchmark down more than 1 percent down to its lowest closing level since the beginning of July.

Seoul shares slid 2 percent, their biggest loss in more than four months, retreating from another record high set in early trade after concerns mount that some stocks may have become too expensive after a nearly 40 percent rise this year so far.

MSCI's index of Asia Pacific stocks excluding Japan fell 1.4 percent as Taiwan fell 1.8 percent and Singapore lost 1.2 percent.

Hong Kong stocks fell, but not as far as other Asian markets, cushioned by Chinese insurers after the government allowed them to invest part of their assets abroad. E-mail to a friend E-mail to a friend

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