Asian Shares Mixed After Oil-Output Cuts

Asian share markets opened higher Monday, as oil surged after major producers struck a deal to cut output along with the Organization of the Petroleum Exporting Countries.

In Japan, a weak yen helped to lift stocks.

But markets pared earlier gains on heavy profit-taking pressure, with China leading declines as the government initiated a crackdown on stock-acquiring insurers. The Shanghai Composite Index was recently down 0.8%, while Hong Kong's Hang Seng Index was off 0.5%.

Elsewhere, the Nikkei Stock Average rose 0.7%, aided by a 0.2% gain in the U.S. dollar against the yen, though the index was earlier up more than 1%. Australia's S&P/ASX 200 was up 0.1%, trimming earlier gains despite a rise in energy stocks, while South Korea's Kospi was down 0.1%.

Over the weekend, non-OPEC oil producers agreed to remove 558,000 barrels a day of crude from the market. That would come on top of 1.2 million barrels a day in cuts already agreed to by OPEC, amounting to a total of almost 2% of global oil supply.

The non-OPEC cuts, if carried out as described over the first half of 2017, would represent an unprecedented level of cooperation among oil-producing countries that have been seeking ways to lift oil prices out of two years in the doldrums.

"The latest step shows that the OPEC has overcome that hurdle," said Vivek Dhar, commodities strategist at Commonwealth Bank of Australia, who cautioned that going forward, compliance by agreed parties will be the key indicator to watch.

Oil-related shares across the region gained, while prices for the international crude-oil benchmark, Brent, surged 4.2% in Asian trade to $56.64 a barrel.

In Australia, Oil Search gained 3.3%, Woodside Petroleum was higher by 2.9% with Santos trading 4.3% higher. Japan Petroleum was also higher by 4.8%, while in Hong Kong, shares of offshore Chinese oil producer Cnooc gained 1.0%.

Shares of Chinese insurers were among the big decliners in the A-shares market on Monday, with China Life Insurance and New China Life Insurance trading down 0.8% each.

The China Insurance Regulatory Commission late Friday banned insurer Evergrande Life from investing further in stocks, saying it had been conducting short-term trading on the stock market. The ban comes two days after the CIRC said it would inspect Evergrande and another insurer for compliance. The recent stock-investment spree by some insurers have helped boost trading activity in the Chinese markets.

Meanwhile, the U.S. dollar gained on Monday as a near-certain interest-rate increase by the Federal Reserve was set for later this week when the Federal Open Market Committee meets. The WSJ Dollar Index, which measures the U.S. currency against 16 others, rose a further 0.1% in Asian trade, after it rose 0.5% in the U.S. on Friday.

However, some analysts cautioned that the market may not be prepared for any hawkish commentary from the Fed this week that could affect investor trading sentiment.

"It is only a matter of time before the Fed gets hawkish because of inflation," said Kay Van-Petersen, global macro strategist at Saxo Capital Markets in Singapore.

U.S. consumer-price gains accelerated in October for the third-straight month, largely due to rising energy costs. With rising crude prices, inflation in the country is widely expected to inch up.

Anjie Zheng and Jenny W. Hsu contributed to this article.

Write to Kenan Machado at kenan.machado@wsj.com

(END) Dow Jones Newswires

December 11, 2016 23:05 ET (04:05 GMT)

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