Asian markets rise as energy firms are boosted by oil surge

27-Sep-2018 Intellasia | AFP | 6:00 AM Print This Post

Most Asian markets rose on Wednesday, with energy firms surging along with oil prices, as traders await the conclusion of a key Federal Reserve policy meeting.

While worries about the China-US trade row continue to erode confidence, the strong US economy and healthy corporate outlook are providing some buoyancy for now.

The weekend decision by major producers from inside and outside OPEC to maintain outputdespite Donald Trump’s call for lower priceshas sent both main contracts sharply higher this week.

Trump hit out at OPEC in his United Nations general Assembly speech Tuesday, accusing it of “ripping off the rest of the world”.

Brent is sitting around four-year highs and WTI is heading close to that mark, with a stronger dollar and an expected output cut from Iran caused by US sanctions adding some lift.

“Oil prices remain in the bulls’ domain amid concern that US sanctions on Iranian crude oil exports will result in much tighter physical market conditions once they take effect in November,” said Stephen Innes, head of Asia-Pacific trading at OANDA.

And while prices were flat Wednesday following a surprise gain in US stockpiles, energy firms shot higher.

CNOOC added 4.4 percent and PetroChina piled on almost five percent in Hong Kong, while Sinopec jumped 2.8 percent. Inpex of Japan put on two percent and Australia’s Woodside Petroleum added 1.5 percent.

The gains boosted broader markets.

Hong Kong jumped 1.5 percent in the afternoon and Shanghai ended 0.9 percent higher.

Mainland Chinese traders were also cheered by news that global equities index compiler MSCI is considering quadrupling the weighting of Chinese large-cap shares in its benchmark Emerging Markets Index over the next two years.

Tokyo closed 0.4 percent stronger, Sydney rose 0.1 percent and Singapore put on 0.7 percent, with Bangkok and Jakarta also up.

But Taipei and Wellington were flat while Manila and Mumbai fell.

With the Fed widely expected to raise interest rates Wednesday, governor Jerome Powell’s post-meeting statement will be closely watched for clues about its next move, with an eye on the increasingly bitter China-US trade dispute.

“The US domestic economy is trotting along nicely; the rest of the world is not in the same place and there’s no doubt that global investor caution is continuing to increase as the trade war between the US and China appears to be heating up,” Nick Twidale, chief operating officer at Rakuten Securities Australia, said in a note.

“Analysts will be watching closely to see if the Fed acknowledges this and its potential impact on the US.”

In early European trade London fell 0.1 percent, while Paris and Frankfurt each rose 0.1 percent.

– Key figures around 0720 GMT -

TokyoNikkei 225: UP 0.4 percent at 24,033.79 (close)

Hong KongHang Seng: UP 1.5 percent at 27,908.46

ShanghaiComposite: UP 0.9 percent at 2,806.81 (close)

LondonFTSE 100: DOWN 0.1 percent at 7,497.89

euro/dollar: DOWN at $1.1765 from $1.1767 at 2015 GMT

Pound/dollar: DOWN at $1.3177 from $1.3181

Dollar/yen: DOWN at 112.90 yen from 112.96 yen

OilWest Texas Intermediate: DOWN 12 cents at $72.16 per barrel

OilBrent Crude: UP three cents at $81.90 per barrel

New YorkDow Jones: DOWN 0.3 percent at 26,492.21 (close)

https://sg.news.yahoo.com/asian-markets-rise-energy-firms-boosted-oil-surge-031205368–finance.html

 


Category: FinanceAsia

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