UPDATE: Asian Shares Lower After US Fall; Energy Stocks Fade

SINGAPORE -- Asian shares were trading lower Tuesday after Wall Street's decline, with energy-related stocks hit by a fall in crude oil prices.

Japan's Nikkei 225 was down 1.3% with Australia's S&P/ASX 200 off 1.1% - hitting a 10-day low - and South Korea's Kospi Composite falling 0.9%. Hong Kong's Hang Seng Index was off 1.6%.

"Index seems to be straying further and further away from the 10,000-point mark despite some pretty decent earnings, suggesting investors are not sure if share prices justify the overall macro and micro environment," said Alex Huang, assistant VP at Mega Securities. Tuesday, the DJIA fell more than 100 points.

Resource-related shares were lower across Asia with Inpex off 1.4% in Tokyo, SK Energy down 1.3% in Seoul, Origin Energy down 2.5% in Sydney and PTT Exploration and Production down 1.9% in Thailand. Front-month Nymex crude oil futures were up 15 cents at $78.83 a barrel on Globex, but dropped $1.82 or 2.3% in New York trade.

Hong Kong property developers were lower on worries of more government measures to cool the city's skyrocketing property prices. Henderson Land fell 4.3% while SHK Properties was down 3.2%. The Hong Kong Monetary Authority's deputy chief executive, Y K Choi, said Friday the city's luxury property market was overheated with prices exceeding the peaks in 1997.

Metals and banking shares fell in Shanghai, taking the main index down 1.8% to 3054.54. "There is profit-taking in the air but I think the market will regain its upward momentum after the correction, unless the Shanghai index drops below 3000," said Zhou Lin at Huatai Securities. Jiangxi Copper was down 3.2% while Yunnan Copper fell 2.9%.

Financial stocks were weak in Tokyo, alongside trading houses, with Mitsubishi Corp off 4.7% and Marubeni down 3.5%.

Still, "the foreign exchange rate may help the market from falling sharply," said Yumi Nishimura, a market analyst at Daiwa Securities SMBC. The U.S. dollar was trading at Y92.11 against the Japanese yen, from Y91.94 around the time of the Japanese stock market close Tuesday, which was positive for exporters.

Australian shares were broadly lower, with Westfield off 1.9%, BHP Billiton down 1.7% and Fairfax Media falling 2.3%.

Southern Cross Equities said equities were under pressure because heavy U.S. bond issuance was likely to generate U.S. dollar demand, taking money out of the stock market. But some other analysts said buying from offshore investors in Australian banks may continue, amid optimism over the local bank earnings season, which kicks off with NAB's full-year results Wednesday.

Sentiment in Korea was still supported by Monday's reassuring third quarter gross domestic product data. Hyundai Motor gained 0.4% with LG Electronics up 2.2%.

Elsewhere, New Zealand's NZX-50 was 0.8% lower, while Taiwan stocks slipped 0.4%. Singapore's Straits Times Index retreated 0.6%, Malaysia's Kuala Lumpur Composite Index was 0.7% lower while Indonesia shares fell 1.3%. Shares in the Philippines were flat and Thai stocks slipped 0.8%.

The euro recovered a little from its early fall, with the single currency at $1.4881 against the U.S. dollar, from a low of $1.4849 and $1.4865 late in New York, and at Y137.09 against the Japanese yen, from Y137.08.

Still, the euro was showing signs of strain, said analysts at UBS. While "few observers would deny the eurozone is enjoying a moderate economic recovery, the rapid rebound in activity and sentiment looks to be slowing. Valuations in asset markets already look hard to justify according to current growth figures, and if growth itself stutters, overstretched risk positions will need to correct."

Lead Japanese government bond futures reversed an early decline, helped by weakness in equities, with the contract up 0.07 at 138.06 points.

While JGB yields were lower across the curve, Barclays Capital chief strategist Chotaro Morita said the downside was limited. "With the U.S. 10-year yield breaking above the 3.5% threshold overnight, this (upward) pressure looks likely to remain for some time." The 2-year yield was down 0.5 basis point in Japan at 0.275%.

The London Mercantile Exchange 3-month copper contract was down $20.50 at $6,587.50 per ton from the London PM kerb, while spot gold was up $3.50 from New York, at $1,041.50 a troy ounce.