Asian shares slump as global markets struggle

Asian stocks fell on Wednesday as regional markets battled the global headwinds of lacklustre European and US economic data and a renewed drop in oil prices.

Analysts warned bourses would continue to track battered commodity prices, with oil falling again Wednesday after Iran's oil minister called a proposal by Saudi Arabia and Russia to freeze production "ridiculous" as it seeks to boost output after years of sanctions-constrained sales.

Oil prices were also hit by Saudi Arabia's oil minister Ali Al-Naimi ruling out any production cuts to address an ongoing price rout, adding a freeze in output was more realistic.

"Overall we continue to see markets which are more or less moving in line with movements in commodity prices," said David Levy, portfolio manager at Republic Wealth Advisors.

The pound fell to a fresh seven-year low on growing worries that Britain may vote to leave the European Union, as Prime Minister David Cameron ramps up his bid to stay inside the 28-nation bloc.

Sterling briefly dropped as low as $1.3975 in morning Tokyo trade, its lowest since March 2009.

The yen, the best performer among major currencies this year, was resurgent as safe haven assets saw a lift.

But Asian bourses tracked losses in global markets, which were on the back foot after a closely-watched report rated German business confidence in February at the lowest level since December 2014, and Wall Street fell more than 1 percent on Tuesday.

The price of oil continued to struggle, with US benchmark WTI, for April delivery, down 1.73 percent Wednesday, while Brent, also for April, lost 0.99 percent.

"It will take some time before market sentiment does turn," Kerry Craig, global market strategist at JPMorgan Asset Management, told Bloomberg TV in Melbourne.

"It's still very pessimistic. Most investors are very risk averse. You need catalysts or triggers such as an oil price stabilisation, clarity about what the Fed is actually going to do and what we see happening with the Chinese currency and economic data."

- No pact on output -

Traders, meanwhile, were betting the US Department of Energy's weekly petroleum inventories report Wednesday will show another increase in US crude stockpiles.

"There won't be a pact on output, there's no possibility of that occurring because there are insufficient levels of trust," Michael McCarthy, a chief strategist at CMC markets in Sydney, told Bloomberg News.

"The market is still in surplus and will remain that way for some time."

Tokyo shares led the decline, falling 0.65 percent by the break, with resumed yen strength weighed on exporters.

Investors are focusing on the Bank of Japan's ability to further weaken the currency after policymakers led by governor Haruhiko Kuroda introduced a negative interest rate to their monetary arsenal.

"The Japanese equity story has been unnecessarily destabilised by the incremental move into negative rates," Christopher Wood, a strategist at CLSA Ltd, told Bloomberg.

Hong Kong was down more than 1 percent in morning trade while Shanghai was off off 0.16 percent, despite the Beijing leadership promoting policies to boost urbanisation and improve healthcare for the elderly.

Meanwhile ahead of a meeting of officials from the world's largest economies in Shanghai later this week there have been calls for increased fiscal support as authorities grapple with reduced monetary leeway with Japan and the eurozone already ushering in negative interest rates.

"A lot of people have been wanting to see increased global coordination coming from the G-20 given that central banks in the Western world at least seem to be approaching some kind of limit to monetary policy," said Martin Enlund, chief analyst at Nordea Markets in Stockholm, according to Bloomberg.

- Key figures around 0245 GMT -

Tokyo - Nikkei 225: DOWN 0.65 percent 15,948.31 points (break)

Shanghai - composite: DOWN 0.16 percent at 2,898.55 points

Hong Kong - Hang Seng: DOWN 1.11 percent at 19,198.42 points

Euro/dollar: DOWN at $1.1012 from $1.1017 on Tuesday

Dollar/yen: DOWN at 111.94 yen from 112.08 yen on Tuesday

New York - Dow: DOWN 1.1 percent to 16,431.78 (close)

London - FTSE 100: DOWN 1.3 percent at 5,962.31 points (close)

-- Bloomberg News contributed to this report --