Asia stocks inch up after Wall Street’s gains, oil prices slide

TOKYO, Sept 28 (Reuters) – Asian stocks edged up early on Wednesday following an overnight rise for U.S. stocks, while reduced hopes that a meeting of major producers would reduce a oversupply weighed heavily on crude oil prices.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.1 percent.

Australian stocks were up 0.5 percent while South Korea’s Kospi was flat. Japan’s Nikkei was last down 1.1 percent.

Overnight, the Dow rose 0.7 percent and Nasdaq added 0.9 percent. A perceived win by Democrat Hillary Clinton over Republican Donald Trump at the first presidential debate gave broader support to equities, although sliding oil prices were a drag on the energy sector.

Oil fell about 3 percent on Tuesday after Saudi Arabia and Iran dashed market expectations that the two major OPEC producers would find a compromise this week at a meeting in Algiers to help ease a global glut of crude.

U.S. crude had crawled up 0.45 percent to $44.87 a barrel early on Wednesday, the final day of the Sept. 26-28 International Energy Forum gathering.

With oil prices having dropped to less than half of their 2014 highs, the Algiers talks are OPEC’s second attempt at an output agreement after a failed round in Qatar in April.

“The market currently does not expect any agreement at this meeting, so no agreement should have only limited negative impact on the oil price,” wrote Marshall Gittler, head of investment research at FXPRIMUS.

“Expectations are now so low though that if by some miracle they did come to even a half-hearted agreement, that would probably send prices up sharply.”

In currencies, the dollar was flat at 100.470 yen.

It had popped up to 100.990 yen on Tuesday when Clinton was seen to have emerged as the winner at the debate and removed an element of uncertainty. But the rise petered out with the market reminded that Clinton also favours a weaker dollar, and with the greenback also hurt by falling U.S. yields.

The euro was steady at $1.1217 after losing about 0.4 percent overnight on concerns over Europe’s banking sector.

Near-term market focus was on European Central Bank President Mario Draghi, who will face tough questions from German lawmakers later on Wednesday about the central bank’s monetary policy.

Federal Reserve Chair Janet Yellen will deliver semi-annual testimony before the U.S. House Financial Services Committee.

The Mexican peso, which jumped against the dollar following Clinton’s perceived debate win, held to its gains.

The currency stood little changed at 19.38 pesos to the dollar, having rallied on Tuesday from a record low of 19.92 hit earlier on worries that a Trump win would threaten Mexico’s exports to the United States.

The 10-year U.S. Treasury note yield hovered near a three-week low of 1.546 percent touched overnight amid speculation that Europe’s banking woes could delay the Fed’s next interest rate hike.