Asia: Equities edge lower amid increase in geopolitical tensions

Asian stocks edged mostly lower on Wednesday, dragged down by a fresh escalation in geopolitical tensions.

On Tuesday, a Turkish military jet was reported to have shot down a Russian warplane near the Syrian border, after it had allegedly entered Turkish airspace and ignored warnings to return.

"Investor focus shifted away from the economic calendar with attention diverted towards the growing diplomatic crisis after a Russian jet was downed by Turkey near the Syrian border," said FXTM research analyst Lukman Otunuga.

"Although the equity markets have not been heavily affected due to the recent geopolitical developments, there is some anxiety being shown, and the markets slipped following the news."

The Nikkei Stock Average fell 0.39%, bringing a four-day winning streak to a halt, while Hong Kong's Hang Seng Index dropped 0.40%.

There was, however, some positive news for Japanese investors after data released on Wednesday showed the small business confidence index rose to 49.9 in November, the highest level since March this year, from 48.7 in the previous month.

The sub-index measuring confidence in the manufacturing sector rose to 49.6% in November from 48.1 in October, while the gauge tacking morale for the non-manufacturing sector improved for the first time in three months in November, rising to 50.2 from 49.1.

Elsewhere, Australia's S&P/ASX 200 and South Korea's Kospi declined 0.63% and 0.34% respectively, while the Shanghai Composite Index bucked the trend and gained 0.88%.

Oil prices, meanwhile, rebounded overnight before declining again on Wednesday amid fresh concerns over a global surplus, with Brent crude down 1.36% to $45.50 as of 1118 GMT. However, the overnight gains delivered a timely boost to energy stocks in the Asia Pacific region, with the S&P/ASX 200's energy sector gaining 0.9%, as Santos and Origin Energy gained 3.47% and 3.13% respectively, while AWE and Liquified Natural Gas rose 3.4 and 7.36% respectively.

In Japan, oil and gas developer Inpex gained 1.19% and oil refiner Idemitsu Kosan gained 2.04%, while Hong Kong-listed oil producers Cnooc and PetroChina advanced 3.28% and 0.35% respectively.

Rising oil prices, however, put a number of airline stocks firmly on the back foot, with Qantas Airways, Cathay Pacific Airways and Japan Airlines losing 1.42%, 1.88% and 0.88% respectively.

Metal producers and mining stocks were also under cosh, after nickel and copper relinquished Tuesday's gains and were on the retreat on Wednesday. In Australia, Rio Tinto, Fortescue Metals and BHP Billiton fell 0.59%, 1.42% and 0.20% respectively.

On the currencies front, the yen declined 0.11% against the dollar, while the Australian dollar slid 0.05% against its US counterpart.