CHINESE BEARS: China's market benchmark has tumbled into bear territory as trade tensions with Washington spook investors.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 27, 2018. US gold futures GCcv1 fell 0.34 percent to $1,255.60 an ounce.
The increase in oil improved the Wall Street energy sector pushing 1.4 percent upwards, putting it on top of the biggest gainers on the S&P 500. The S&P 500 index erased an early-morning jump to close 0.9 percent lower at 2,699.63 on Wednesday, its lowest closing level in almost a month. Japan's Nikkei 225 fell 0.3 percent to 22,283.34 and South Korea's Kospi was flat at 2,352.24. Taiwan's benchmark fell but Southeast Asian indexes were mostly higher.
China defended its trade practices Thursday as being beneficial to the world as it tries to ease pressure from the United States and Europe to abandon what they consider to be Beijing's protectionist policies.
China led Asian markets mostly lower on Wednesday as jitters over trade conflicts between the world's major economies lingered.
A government report repeated promises to cut tariffs and open more industries to foreign investment.
Meanwhile, Trump backtracked on a plan to restrict Chinese investment in the U.S., telling reporters that he would probably let Congress go ahead with legislation to strengthen the Committee on Foreign Investment in the U.S. (CFIUS), instead of taking executive action.
The state-owned China Daily newspaper in a separate editorial also published on Wednesday said that USA industries and workers could eventually "feel the pain" as Trump's policies were affecting global supply chains.
The 10-year U.S. Treasury's yield slipped to 2.8492 percent, keeping dollar demand in check. In response, China will raise import duties on $34 billion worth of American goods.
ANALYST'S TAKE: "To a large extent, the Chinese market is one driven by speculation", said Jingyi Pan, a market strategist at IG in Singapore, adding that "with sentiment rolling over itself of late, particularly over the escalating trade tensions that seems to have no end, it should be of little surprise to find the market crumbling". "Dollar strength, a generalized concern about global growth, higher oil prices, none of this is helping", said Robert Carnell, head of research and chief economist at ING Bank.
The market rallied further after the American Petroleum Institute said US crude inventories had fallen by much more than expected.
ZTE Corp, China's second-largest telecommunications equipment maker, ceased major operations after the United States imposed a ban on USA suppliers in April.
USA crude gained 17 cents to $70.70 after it surged 3.6 percent overnight. Brent crude, used to price global oils, added 62 cents to $76.93 per barrel in London.
The euro rebounded on Wednesday as concerns about an escalating trade conflict held back the dollar, while traders said markets needed clarity on a developing political crisis in Germany and an European Union summit before pushing the euro higher. The euro ticked up to $1.1584 from $1.1557.