Asia bourses rise as oil rebounds
February 16 2016 07:38 PM
KRISHNAN
Investors look at computer screens showing stock information at a brokerage house in Shanghai. The Shanghai composite closed up 3.3% at 2,836.57 points yesterday.

AFP/Tokyo

Asian markets extended their rally yesterday as hopes were raised that major oil exporters Russia and Saudi Arabia could agree action to ease a global supply glut, and authorities will step in to boost growth in major economies.   
Gains on European markets also gave investors confidence to buy again as Shanghai surged more than 3% on speculation China is preparing stimulus measures to boost the world’s number two economy.
Chinese stocks were also given a lift by official figures showing bank lending surged to a record high in January, as credit gushed to help boost the flagging economy.
In Tokyo, the Nikkei 225 rose 0.2% at 16,054.43 points; Shanghai – composite up 3.3% at 2,836.57 points and Hong Kong - Hang Seng rose 1.1% at 19,122.08 points at the close yesterday.
Analysts expect further monetary loosening after six interest rate cuts in the 12 months to November and several cuts in the amount of funds banks keep in reserve.
“Looking ahead, we expect credit growth to remain strong given that the PBoC has kept monetary conditions loose,” Julian Evans-Pritchard, China economist at Capital Economics, said in a research note.
Energy firms were among the big winners, tracking a second successive rally in crude prices, which came as Russian and Saudi oil ministers met yesterday in Doha to discuss the global supply glut that has sent prices plunging.
The news is a much-needed positive for the oil market, which has been buffeted by a global supply glut, overproduction, weak demand, a slowdown in the world economy and a strong dollar. Saudi Arabia has insisted that it will not cut production to tackle a global glut unless major producers outside the 13-nation Organisation of Petroleum Exporting Countries—including Russia—co-operate.
“These are still very early days and nothing concrete has been agreed, but there is a growing sense that countries could be more flexible, although Riyadh would insist that everyone else contribute to the cut,” Amrita Sen, chief oil analyst at Energy Aspects in London, said.
Prices last week touched a near 13-year low but sprang back more than 10% on Friday as rumours of the talks emerged.
They extended those gains on Monday and yesterday the US benchmark West Texas Intermediate rose more than 5% back above $31 a barrel, while Brent added more than 6% to rise to more than $35.
Energy firms soared. PetroChina in Hong Kong jumped 6% while CNOOC gained more than two%. Sydney-listed mining giant Rio Tinto was 2.3% up and Woodside Petroleum 5.7% up.
The advance helped inject some life into regional stock markets after a booming day in Europe, where London jumped 2%, and Paris and Frankfurt soared around 3%. Wall Street was closed for a public holiday.
Shanghai led the way, finishing up 3.3%, while Hong Kong ended 1.1% up. The gains come as speculation intensifies that Beijing is preparing further stimulus after data on Monday showed a slide in exports and imports.



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