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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