Investors follow financial information at a securities brokerage in Shanghai. Shares closed down 0.4% at 3,636.09 points yesterday.
AFP
Tokyo
Asian stock markets extended their gains yesterday, with buying supported by another Wall Street rally as a positive reading on US growth and consumer spending renewed confidence in the world’s top economy.
Hong Kong’s Hang Seng up 0.96% at 22,040.59 points; Shanghai composite fell 0.4% at 3,636.09 points and Sydney S&P/ASX200 up 0.5% at 5,141.80 points at the close yesterday.
Oil prices also enjoyed another rise—with the US benchmark at parity with its European counterpart after overtaking it Tuesday for the first time in nearly a year—while regional energy firms ticked higher.
US stocks climbed for a second day on data showing steady economic growth in line with expectations during July-September. Personal consumption, which drives about two-thirds of the economy, was also solid.
The figures settled some nerves on global markets. Traders had grown concerned about the outlook due to the plunge in oil prices and weakness outside the US, particularly in China.
Last week’s euphoria over the Federal Reserve’s interest rate rise, which had boosted overall confidence in the economy, had also started to give way to caution about the bank’s plans for its next rise.
“Consumer spending looks like it’s helping the US economy,” James Lindsay, an Auckland-based fund manager at Nikko Asset Management, told Bloomberg News.
“Volumes tend to get pretty light at this time of year. Markets have had a reasonable run and value is a lot harder to come by.
“The key things are still what happens with China, the flow-on effects into commodities and what the Fed does and how that affects sentiment and currencies.”
Crude prices saw a rare second straight gain after climbing Tuesday, when WTI topped Brent for the first time since January. In the afternoon in Asia, WTI was up 0.7% at $36.40 and Brent added 0.8% to also sit at $36.40. The once-wide spread between the two contracts has narrowed since Washington last week passed a bill lifting a 40-year ban on US oil exports which analysts said could ease a glut in the country.
However, Bernard Aw, market strategist at IG in Singapore, said the outlook for the commodity, which is around 60% off its high of above $100 in summer 2014, was still “bearish” due to a global oversupply.
Attention is now on a weekly stockpiles report later in the day from the US Department of Energy.
Energy firms were buoyant after a painful year. Sydney-listed Rio Tinto surged 4.2% and BHP Billiton was up 3.5%, with a rise in iron ore prices also providing support. CNOOC, PetroChina and Sinopec in Hong Kong all soared 4% while Woodside gained more than one% in Sydney.
On stock markets, Hong Kong ended up 1%, Sydney closed 0.5% higher and Seoul strengthened 0.3%. However, Shanghai succumbed to late profit-taking, slipping in the last 20 minutes to end 0.4% lower.
The dollar remains subdued against its main rivals. It bought ¥120.90, well off last week’s highs above ¥123.
The euro sat at $1.0930 – heading towards $1.10 from just above $1.08 last week following the Fed rate rise, with speculation the next rise could be as late as April. In early European trade, London advanced 0.9%, Frankfurt jumped 1.3% and Paris added 1.0%.
