Asian stocks mostly advanced on Wednesday, despite losses on Wall Street, as oil prices fell following the United Arab Emirates' decision to leave Opec. The UAE's departure, effective Friday, is seen as a blow to the oil cartel's influence.
South Korea's Kospi rose 0.3%, Hong Kong's Hang Seng gained 1.4%, and the Shanghai Composite added 0.3%. However, Taiwan's Taiex fell 0.6%. Japan's markets were closed for a holiday.
Brent crude oil for June delivery dropped 0.5% to $110.71 a barrel, while July Brent fell 0.6% to $103.74. Before the Iran war began in late February, Brent was around $70. The UAE, one of Opec's largest producers, has been frustrated by production quotas that limited its output.
Analysts noted that the UAE's exit could increase oil output and reduce Opec's effectiveness. However, short-term oil prices remain tied to the reopening of the Strait of Hormuz, which remains largely closed due to the Iran war and stalled US-Iran peace talks.
On Wall Street, the S&P 500 fell 0.5% from its record high, the Dow edged down 0.1%, and the Nasdaq dropped 0.9%, led by losses in AI-related stocks. The Federal Reserve is expected to announce an interest rate decision later Wednesday.
