Rally lifts energy firms, US dollar dips on risk confidence
Oil prices on Wednesday extended a rally on hopes a global supply glut could be easing, boosting Asian energy shares, while a broadly confident outlook saw emerging currencies surge against the U.S. dollar.
Market heavyweight Samsung Electronics dragged South Korean shares higher as it soared after flagging a massive increase in operating profit for July-September.
Global markets have steamed ahead since the release Friday of underwhelming U.S. jobs data that lowered expectations the U.S. Federal Reserve will tighten monetary policy before the end of the year.
On Tuesday U.S. crude benchmark West Texas Intermediate jumped 4.9 percent while Brent North Sea crude soared 5.4 percent after the U.S. Department of Energy forecast a drop in average production in 2016 and an increase in global demand this year.
“There’s a bit of optimism creeping into the market,” Jonathan Barratt, the chief investment officer at Ayers Alliance Securities in Sydney, told Bloomberg News.
“Prices have found a base, US$45 has been a very solid level and it will be very hard to break back down below that.”
Among Asian energy players, Hong Kong-listed shares of mainland China’s CNOOC surged 13.74 percent and PetroChina rallied more than 9 percent. In Sydney, Santos soared almost 12 percent while Origin was up 9.7 percent.
Regional stock markets were also higher, with Hong Kong closing 3.13 percent up and Singapore adding 2.22 percent in the afternoon. Sydney closed 0.59 percent stronger and Seoul advanced 0.76 percent by the close.
Tokyo recovered from morning losses to end 0.75 percent higher despite the central bank’s decision to hold fire on expanding its asset-buying scheme in the face of sputtering growth.
In Seoul, Samsung piled on 8.7 percent after it said it expected to see an 80 percent jump in thirdquarter operating profit.
Analysts put the blockbuster figure down to a weaker Korean won and improved sales of televisions and chips as it moves away from its reliance on smartphones owing to stiff competition from Apple and Chinese rivals.
“With sluggish sales of Galaxy S6 ... the (semiconductor and TV) businesses were a major factor behind the surprise earnings,” said Lee Seung-Woo, analyst at IBK Securities.