Hong Kong - Asian shares dropped on Thursday, with energy stocks taking a hammering from a slide in oil prices while a stronger dollar piled pressure on commodity producers.
Energy stocks dragged Wall Street and European equities lower on Wednesday after US oil prices dipped below US$40 (S$55) a barrel for the first time in five sessions.
Crude posted its biggest loss in six weeks after news US commercial stockpiles surged by 9.36 million barrels last week, more than three times the prediction of analysts polled by Bloomberg News.
Hints the US could raise interest rates next month drove the dollar higher, piling pressure on commodities and sending Sydney's resources-rich benchmark tumbling 1.13 per cent.
Chinese stocks also fell, with Shanghai down 1.36 per cent and Hong Kong falling 1.52 per cent in afternoon trade. Tokyo closed down 0.64 per cent and Seoul 0.46 per cent.
"The oil price and equity markets are teetering on the verge of a much larger pullback as hawkish (US Federal Reserve) officials have lifted the US dollar," said Angus Nicholson, market analyst at IG.
"Markets in Asia look to be rolling over as the whole region suffered steady losses throughout the session." Comments from several Fed members have raised expectations the bank may start to take a more bullish approach than signalled last week, when it held interest rates steady.
James Bullard, president of the St Louis Fed, fuelled speculation on Wednesday when he said more upbeat employment figures could see the US central bank tighten monetary policy.
"You get another strong jobs report, it looks like labour markets are improving, you could probably make a case for moving in April," he said.
A stronger greenback makes it more expensive for investors using other currencies to buy dollar-priced commodities, and raw materials from iron ore to gold took a hit.
Oil prices were mixed during Asian trade on Thursday. The US benchmark WTI added 12 cents but held under US$40 a barrel, trading at US$39.91 in mid-afternoon, while Brent fell 15 cents to US$40.32.
"Fed officials this week reminded the market that they still want to move forward with the rate hikes," Mark Lister, head of private wealth research at Craigs Investment Partners, told Bloomberg News.
"Investors have been looking for a reason to pull back and this is one... Concerns remain about how sharp the slowdown is in China." Oil has taken a battering over concerns world demand cannot keep pace with a glut of supply as economic growth slows, particularly in major consumer China.
Moves by members of the OPEC producer group to cap production - fresh talks are planned in Qatar on April 17 - have pushed prices up from the 13-year lows they flirted with this year.
But few are predicting a major recovery any time soon, and energy companies slid in Asia on Thursday.
PetroChina fell 4.28 per cent after it reported profits tumbled almost 70 per cent to 35.5 billion yuan (S$7.4 billion) - their lowest level since 1999 - and CNOOC lost 3.38 per cent in Hong Kong.
Commodities traders were also hit. BHP slumped 3.41 per cent in Sydney, while Japanese trading house Mitsui & Co lost 7.51 per cent after it forecast its first loss since 1947.
Shares in Australia's ANZ Bank also lost 5.21 per cent after the lender forecast its bad debt charges from resource companies will be A$100 million (S$103 million) higher than predicted.