Asia stocks surge on global rally as oil rebounds

TOKYO (AFP) – Asia stocks jumped Wednesday, building on a strong lead from Wall Street and Europe, and as investors adjusted to the prospect of a US rate hike in the near future.

Energy stocks soared in Hong Kong and Sydney as oil prices rebounded, while in Tokyo exporters were lifted by a weaker yen, which is a plus for their profitability.

The gains in Asia followed a jump in European markets, which had received a boost Tuesday as Brexit fears eased on the back of opinion polls that suggested Britain will vote to remain in the European Union next month.

Wall Street stocks also had a good day after Commerce Department figures showed US new-home sales in April surged to their best level since January 2008, prompting analysts to see a strengthening in the housing market, a key sector for US growth.

The Fed has repeatedly stated its intention to continue raising rates this year after December’s first hike in nine years, but until recently investors had discounted the possibility of an imminent increase, given the market panic at the beginning of 2016 on concerns of soft global growth.

‘’Strong US new-home sales have added credence to the Fed’s claims that the US economy may be strong enough for another rate hike in June or July,’’ Angus Nicholson, a market analyst at IG in Melbourne, said in a commentary.

The markets are now reacting well to the news, analysts said, as a sign the economy is doing better.

In New York City, technology and banking shares were among the big winners Tuesday as US stocks powered higher behind greater confidence in the US economic outlook.

Investors had been troubled by the prospects of a Federal Reserve interest rate increase, but ‘’now they’re starting to embrace it,’’ said Charlie Bilello of Pension Partners. ‘’It means the economy is doing a bit better.’’

Sentiment was further boosted by Commerce Department data that showed US new-home sales in April surged to their best level since January 2008 despite a hefty rise in median prices.

The Dow Jones Industrial Average advanced 1.2 percent to 17,706.05.

The broad-based S&P 500 gained 1.4 percent to 2,076.06, while the tech-rich Nasdaq Composite Index jumped 2.0 percent to 4,861.06.

Analysts said US stocks also benefited from positive momentum in Europe, where equities rallied strongly in part due to polls showing Britain was more likely to vote in favor of staying in the European Union.