expectations that a production deal among the organization of the petroleum exporting countries would unravel dominated asian trade on monday, adding volatility to regional stocks and currencies. opec said saudi arabian oil officials won<u+2019>t attend a meeting on monday with non-opec members, including russia. this intensified concerns that global producers won't be able to reach an effective agreement on production cuts at a critical meeting of the 14-nation cartel on wednesday. japan<u+2019>s nikkei 225 closed down 0.1% and australia<u+2019>s s&p/asx 200 was off 0.8%, while hong kong<u+2019>s hang seng index finished up 0.5%, largely thanks to news over the weekend of the imminent launch of a trading link with shenzhen. the price of brent crude , a global benchmark, fell 3.6% on friday. this showed that the market was starting to price in a failure at this week<u+2019>s opec meeting, said ric spooner, chief market analyst at cmc markets. brent crude extended its decline on monday, shedding 0.7% in late asia trade. <u+201c>we could see a big rally if they see a plausible agreement [on a production cut],<u+201d> mr. spooner said. <u+201c>but assuming that opec does not agree, for the next few months it does set up for a lower oil price [in the] high 30s to low 40s [u.s. dollar] range. we<u+2019>ve still got big inventories and supply overhang.<u+201d> the oil gloom hit asia<u+2019>s biggest energy stocks. in australia, woodside petroleum closed down 2.3% and bhp billiton , whose second-biggest division is petroleum, shed 2.6%. japanese oil explorer inpex was down 1% and in hong kong, chinese oil major cnooc fell 0.4%. the drop in oil prices is hitting u.s. inflation expectations, which has pulled down u.s. treasury yields. that has finally knocked back a lengthy dollar rally. the yield on 10-year u.s. treasurys was last at 2.3339%, down from 2.3700% on friday, according to thomson reuters. the dollar was giving up gains seen since donald trump was elected u.s. president, said marito ueda, director at fx prime by gmo. mr. trump campaigned on a promise to spend heavily on infrastructure, which has pushed up u.s. inflation expectations, increasing yields on u.s. treasurys, sparking inflows into dollars. mr. ueda said news that three u.s. states were preparing to recount election ballots had thrown cold water on the trump-driven dollar rally, even though any recount would be unlikely to change the vote result. officials in wisconsin, michigan and pennsylvania, critical states that gave president-elect trump his margin of victory last month, were gearing up for recounts. asian currencies were broadly up monday. the korean won gained 0.5% and the singapore dollar rose by 0.3%. the japanese yen was the biggest gainer in asia on monday, rising 1%. this as traders sought the safety of the yen on the view that opec<u+2019>s production deal was unraveling. traders <u+201c>are very, very nervous about the oil scenario and you see that expressed in the sensitive pair,<u+201d> said oanda senior foreign-exchange trader stephen innes, referring to the u.s. dollar and the yen. toyota motor fell 0.5% and nissan motor was down 0.9%, as japanese exporters are less competitive when the yen strengthens. the hang seng index strengthened after news friday that the trading link connecting the shenzhen and hong kong stock exchanges will open dec. 5, allowing foreigners to invest in china<u+2019>s fastest-growing companies. zinc futures hit a nine-year high in asia trade monday thanks to robust chinese demand. imports of the commodity into china in october jumped over 50% from the previous month as demand for galvanized steel continued to improve. <u+2014>rachel rosenthal, kenan machado and rhiannon hoyle contributed to this article. write to willa plank at willa.plank@wsj.com
asian shares mostly down on skepticism about opec deal - wsj
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