Asian stocks rally with oil, Tokyo hits 10-month high
ASIAN markets rose yesterday with energy stocks tracking a surge in oil prices, while Tokyo hit a fresh 10-month high after an early sell-off prompted by a huge earthquake off the northeast coast.
The quake struck around dawn in the same region as the deadly 2011 tremor, sparking fears of another tragedy. But the tsunamis this time were not as high as five years ago.
The yen strengthened against the dollar after the quake as investors sought out safe-haven assets, but gave up most of the gains as it emerged there was no major damage.
The dollar fell to as low as 110.27 yen before bouncing back to sit at 111.00 yen in the afternoon, with expectations it will extend gains on bets for higher US interest rates under Donald Trump’s presidency.
Japan’s Nikkei rebounded to end up 0.3 percent at its highest mark since January.
Hopes that the OPEC oil cartel and Russia will be able to hammer out an agreement to cut production have lit a fire under crude prices and in turn energy stocks.
With OPEC’s twice-yearly gathering set for November 30, speculation is mounting that officials are close to a deal to tackle a global supply glut.
“Market players are positioning themselves for higher prices, and oil will be in the US$50 to $55 range if there is a deal,” Giovanni Staunovo, an analyst at UBS Group AG in Zurich, told Bloomberg News.
“OPEC members are building a lot of expectations and taking too much exposure to let a deal fail.”
Both main contracts surged more than 4 percent on November 21 and gained nearly 1pc in Asian trade.
Hong Kong’s Hang Seng Index closed 1.4pc higher and Shanghai ended up 0.9pc. Sydney added 1.2pc, Seoul 0.9pc and Singapore 0.6pc.
Taipei rallied more than 1pc while Jakarta, Manila and Kuala Lumpur also gained after recent losses. But traders remain on edge about Mr Trump’s plans for global trade, fearing possible huge tariff increases.
The uplift tracked a record close on Wall Street for all three main indexes thanks to the energy rally and expectations for a rate rise. –
A pedestrian walks past an electronic quotation board displaying the exchange rate of the Japanese yen against the US dollar in Tokyo yesterday.