Improving demand and the weakening dollar helped fuel a jump in copper prices to five-month peaks, while oil has also been boosted by a report pointing to lower US stockpiles.
Both crude contracts jumped 3% on Tuesday with traders also cheered by news that global crude producers, meeting in Russia Monday, called for stricter adherence to an agreement to cut output.
Big-name energy firms flew yesterday, with BHP up more than 3% and Rio Tinto 2.6% higher in Sydney, while Hong Kong-listed CNOOC added 2.3% and PetroChina was up more than 3%.
Tokyo’s Inpex and JXTG Holdings piled on more than 1%.
“Things are looking a little bit better,” Michael Loewen, a strategist at Scotiabank in Toronto, told Bloomberg News.
“If we continue to see demand do well and some refined products draws in gasoline and distillates, the market should perform pretty well.” But the long-term outlook for oil could be weak without deeper output curbs by Opec, said Richard Gorry, managing director at industry consultant JBC Asia.
Prices are currently supported by the summer driving season which ramps up demand but that trend will reverse from early September as consumption weakens, he added.
On stock markets Tokyo ended 0.5% higher, while Hong Kong added 0.3% in the afternoon and Shanghai closed up 0.1%.
Sydney ended up 0.9% and Singapore was 0.3% higher. Manila was up 1.1% but there were losses in Seoul and Taipei.
Investors tracked a record for the S&P 500 and Nasdaq in New York and another strong day of corporate results, including from McDonald’s and construction giant Caterpillar.
Support also came from a series of positive readings from Europe and the US. Greece enjoyed a successful return to the debt markets after a three-year absence, while a closely watched index of German business confidence hit an all-time high for July.
That was followed by a reading of US consumer sentiment also moving towards record levels after falling for two months in a row. Republicans’ success in pushing through a vote to discuss repealing Obamacare also gave traders hope that Donald Trump will soon be able to concentrate on his economy-boosting agenda.
The dollar enjoyed something of a bounce against the yen on Tuesday, pushing back towards ¥112 before the end of the Federal Reserve’s latest policy meeting.
While it dipped in Asia it was well off the levels around ¥111 seen 24 hours earlier.
Dealers will be hoping for guidance from Fed boss Janet Yellen on its plans for interest rates and when it will start winding in its bond holdings balance sheet, effectively sucking cash out of the market.
While there is no way of knowing what they will do, the “latest chatter suggests the (Fed policymakers) may tip their hat to September as the starting date for reducing the balance sheet”, Stephen Innes, head of Asia-Pacific trading at forex firm OANDA, said in a commentary.
In Tokyo, the Nikkei 225 closed up 0.5% at 20,050.16 points; Hong Kong — Hang Seng rose 0.3% at 26,941.02 points and Shanghai Composite ended up 0.1% at 3,247.67 points yesterday.
