ASIA MARKETS: Energy-related Stocks Help Rally Asia Markets As Investors Cheer OPEC Deal
September 29 2016 - 02:21AM
Dow Jones News
By Kenan Machado, Ese Erheriene and Willa Plank
Weaker yen also supports Nikkei
Asian stock markets gained broadly on Thursday after major oil
producers said an agreement to limit production could be finalized
in November.
Australia's S&P/ASX 200 rose 1%, with Japan's Nikkei Stock
Average 1.5% higher and Korea's Kospi up 0.8%. Hong Kong's Hang
Seng Index gained 0.3% and Shanghai Composite Index was up
0.4%.
Members of the Organization of the Petroleum Exporting Countries
said late Wednesday they had proposed cutting their collective
output
(http://www.marketwatch.com/story/opec-reaches-understanding-on-output-cut-2016-09-28-15103110)
to between 32.5 million barrels a day and 33 million barrels a day,
down from August levels of 33.2 million barrels a day. The group,
however, deferred the task of finalizing a plan to make those cuts
until November.
Overnight, oil prices surged 5.3%, their biggest gain in more
than five months. In Asian trade, the Nymex crude price was up 10
cents at $47.15 a barrel, while Brent crude , the international oil
benchmark, added 3 cents at $49.26 a barrel.
"Moving the market is the big news from OPEC," said Alex Wijaya,
a market analyst at CMC Markets. "It was quite a surprise...and
boosted the oil price and commodity-related currencies."
Read:Doubts linger over OPEC's preliminary deal on oil output
(http://www.marketwatch.com/story/doubts-linger-over-opecs-preliminary-deal-on-oil-output-2016-09-28)
Among key energy-related stocks in Australia, Oil Search
(OSH.AU) was up 6.1% and Woodside Petroleum (WPL.AU) gained 5.7%.
Commodity stocks also jumped, with BHP Billiton (BHP.AU) (BLT.LN)
(BHP.AU) gaining 3.6% and Rio Tinto (RIO) (RIO) (RIO) adding
2.3%.
In Japan, oil explorer Inpex (1605.TO) surged 7.2%, while Japan
Petroleum (1662.TO) rose 9.2%.
Gains in Japanese stocks on Thursday were also supported by a
weaker yen against the dollar, with the Japanese currency down
0.5%. Exporters, in particular, benefited as their products became
cheaper to ship. Mazda Motor (7261.TO) rose 2.6%, Honda Motor (HMC)
was up 1.8% and Toyota Motor (7203.TO) (7203.TO) was 0.7%
higher.
Among other Asian currencies, the Indonesian rupiah was up
marginally, while the Malaysian ringgit gained 0.6% against the
dollar.
The New Taiwan Dollar was also higher against the dollar, ahead
of a central bank rate decision later Thursday. Citi said it
expects the currency to strengthen further following a likely rate
cut -- U.S. firm expects the central bank to cut policy rates by
another 0.125 percentage point.
"We see monetary policy accommodation should be sustained in
order to offer cushioning to the sluggish domestic economy," Citi
said in a note.
Analysts expect improved optimism in markets in the near term as
economic conditions stabilize globally amid more steady oil prices
and the widely held view that the U.S. will raise interest rates
from December.
(END) Dow Jones Newswires
September 29, 2016 02:06 ET (06:06 GMT)
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