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Hong Kong - Asian shares mostly fell on Wednesday, led by sharp losses in Shanghai, as oil prices took a hit from news that a crude workers strike in key producer Kuwait had finished after three days.
After an edgy start to the day, investors brushed off another strong lead from Wall Street and Europe to cash in after Tuesday's sharp gains.
Oil, which has been centre stage this week after the collapse of weekend output limit talks, tumbled on Wednesday after the industrial action in Kuwait was called off as union leaders look to negotiate a pay deal.
The walkout slashed Kuwaiti output and provided some much-needed support to the commodity on world markets on Monday and on Tuesday, largely offsetting the failure of the talks between the members of the Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC giants aimed at freezing production.
"The size of the disruption, had the strike persisted, would have been quite significant," Ric Spooner, a chief market analyst at CMC Markets in Sydney, said. "It took quite a lot of oil out of production."
In afternoon trade West Texas Intermediate was down 2.3% and Brent lost two percent.
On equity markets Tokyo's Nikkei ended the day 0.2% higher, with speculation that Japan's central bank will unveil fresh stimulus following last week's double earthquake boosting sentiment.
However, Mitsubishi Motors crashed more than 15% on reports it had conducted faulty emission tests. The news comes as German car titan Volkswagen struggles to recover from its own massive emissions-cheating scandal, which hammered its reputation.
Sydney gained 0.5% and Wellington 0.4%.
China volatility
However, the losses outweighed the gains and Shanghai was the biggest loser, shifting 2.3%.
Analysts said there was speculation dealers were concerned that a string of positive recent data on the world's number two economy, China, could prevent authorities there from unveiling more stimulus measures.
But Wei Wei, an analyst at Huaxi Securities in Shanghai, told Bloomberg News: "We haven't heard anything particular for the decline and it's strange and surprising that the market is dropping at such a fast and steep rate."
Hong Kong ended 0.9% lower, Seoul shed 0.3%, Singapore fell 0.5% and Taipei dived 1.4%. There were also losses in Manila, Jakarta and Bangkok.
The unease on trading floors seeped through to foreign exchange markets, where the dollar retreated against the safe haven yen, while emerging market units gave up early gains or turned negative.
"Volatility in Chinese equities will still be very high, causing investors to be more cautious in other developing countries' markets," said Namchai Techaratanawiroj, the head of research at LH Securities in Bangkok.
"We would see some selling pressure on some shares in the region after the current rallies to lock in profit."
In early European trade London dropped 0.2%, while Frankfurt and Paris each fell 0.4%.
