Energy firms lead Asian stocks rally on Opec deal

Energy shares led a rally across Asian markets yesterday and oil built on the previous day’s near 10% surge after Opec hammered out a last-minute deal to cut oil output for the first time in eight years.Adding to the buying sentiment was a better-than expected reading on Chinese factory output that provided fresh hope the world’s number two economy was stabilising after years of slowing growth.The Opec exporters’ group, meeting in Vienna, said its 14 members had agreed on specific targets that will reduce production by 1.2mn barrels a day from next month, while key non-member Russia also committed to a reduction.Both main contracts surged on the announcement, which ended weeks of uncertainty and volatility on crude markets as the key players bickered over who would shoulder the biggest burden of the cuts, leading to worries a deal would not be reached. Brent and West Texas Intermediate both climbed more than 1% to sit above $50 in Asian trade, pushing regional investors back into energy firms on hopes the higher prices would boost revenues.“The words ‘Opec’ and ‘exceed expectations’ have rarely, if ever, been used in the same sentence.However yesterday’s production deal seems to have done just that,” Jeffrey Halley, senior market analyst at OANDA, said in a note.“Cuts have been shared across all members, including the recalcitrant Iran and Iraq.” Still, the deal lit a fire under energy firms.Tokyo-listed Inpex was the big gainer, piling on 10%, while Woodside Petroleum soared more than 6%. CNOOC ploughed 6.1% higher in Hong Kong and PetroChina almost 5%.Among stock markets, Japan’s Nikkei ended up 1.1% at its highest close this year, while Hong Kong added 0.4% and Shanghai closed up 0.7%. Sydney gained 1.1%, Seoul was flat and Manila added 1.2%. There were also healthy advances in Singapore, Jakarta, Taipei and Wellington.