WPLCD Woodside Petroleum Ltd

Asian markets were largely down in early trade Thursday, with traders focused on oil, earnings and Chinese economic data.

Japan's Nikkei was down 0.3% and Australia's S&P/ASX was off 0.5%, but South Korea's Kospi gained 0.3%.

Oil prices were inching lower in Asian trade after overnight declines. The market is increasingly skeptical that the Organization of the Petroleum Exporting Countries will be able to pull off a prospective deal to cut production.

Australia's Woodside Petroleum was down 1.6%. Among Chinese energy companies, PetroChina slumped 2.1%, while Cnooc fell 3.6% after the company reported production dropped 7.7% year over year to 117.7 million barrels of oil equivalent in the third quarter.

The U.S. reported a 553,000-barrel drop in crude inventories in the latest week. However, the decline was centered on the West Coast, which is isolated from the rest of the network, said ANZ Research, and therefore was being discounted.

"Inventories actually increased along East and Gulf Coasts," said ANZ.

Chinese stocks retreated after data released early Thursday showed that growth in the nation's industrial profits had slowed last month.

China recorded 7.7% year-over-year growth in industrial profits in September, sharply down from the 19.5% growth the previous month, according to the National Bureau of Statistics. Analysts said that Beijing's new property controls had hit construction, and therefore the profits of coal and steel producers, but that this should prove temporary.

"The impact from the economic data on the market can be neglected because they do not reflect the future trend," said Zeng Xianzhao, manager at Chongqing Nuoding Asset Management.

The Shanghai Composite was down just 0.4% on the data but Hong Kong stocks were hit harder. The Hang Seng Index was off 1.2% and the China Enterprises Index, which tracks large mainland companies listed in Hong Kong, was down 1.5%.

China's central bank continued to cheapen the yuan, fixing it 0.05% weaker against the U.S. dollar. However, unlike during previous yuan depreciation pushes, traders appeared to be taking this weakening cycle in stride.

"A flexible exchange rate means it's more market based, and that means if there's a strong dollar, [the yuan] will weaken," said Ben Sy, head of fixed income, currencies and commodities at J.P. Morgan's private bank in Asia. "The market is pretty calm; no one is really panicking," he said.

National Australia Bank said its annual net profit slumped as it booked losses on the sale of its U.K. banking business and control of its life insurance operations, although it maintained its dividend. Net profit dropped to 352 million Australian dollars (US$269 million) in the year through September from A$6.34 billion the year before, the bank said. But cash earnings, which analysts regard as a better indicator of profit as it excludes some one-time costs and gains, rose 4.2% on the year before to A$6.48 billion. NAB is currently trading up 1.6%.

In Japan, camera maker Canon was down 3% after the company Wednesday lowered its profit guidance for the year ending in December, citing the negative effect from a strengthening yen. Messaging-application company Line was down 6.8% after it posted results that undershot market expectations.

Looking ahead, the market will be watching Friday's release of the advanced reading of third-quarter U.S. gross domestic product.

--Jenny Hsu, Kosaku Narioka, Robb M. Stewart, Yifan Xie, Saumya Vaishampayan and Liyan Qi contributed to this article.

Write to Willa Plank at willa.plank@wsj.com

(END) Dow Jones Newswires

October 27, 2016 00:15 ET (04:15 GMT)

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