Wednesday, October 20

Asian shares rise on stronger global risk appitite as oil prices ease


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HONG KONG — Asian shares rallied on Thursday, taking heart from a late recovery on Wall Street after US politicans appeared near to a temporary deal to avert a federal debt default and as Russia reassured Europe on gas supplies, calming volatile markets.

Oil prices also dropped back from multi-year highs hit a day earlier, having been a major contributor to this week’s equities sell off, while US benchmark Treasury yields and major currencies steadied amid the calmer mood.

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MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.25% in early trade, regaining ground lost in recent days to be little changed on the week.

“Sharp increases in energy prices have clearly contributed to the latest leg up in bond yields, which has been accompanied by weakness in equity markets around the world,” analysts at Capital Economics wrote in a note.

As oil prices came off on Thursday, there were gains in share benchmarks in Korea up 1.3%, Australia up 0.64%, and Hong Kong up 2%.

Japan’s Nikkei rose 0.89%, and US stock futures, the S&P 500 e-minis, gained 0.42%.

Chinese markets remained closed for a holiday.

US crude dipped 0.34% to $77.17 a barrel, extending a fall from late on Wednesday after hitting a seven-year high of $79.78 earlier that day. Brent crude was steady at $81.04 per barrel, off its three -year high of $83.47 also hit on Wednesday.

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The falls followed an unexpected rise in US crude stocks.

Gas prices also fell, a day after Russian leaders indicated that supply to Europe could increase, which contributed to a late rally on Wall Street after declines in European stock markets.

The Dow Jones Industrial Average rose 0.3%, the S&P 500 <.spx gained and the nasdaq composite added also boosted by a proposal from senate top republican mitch mcconnell to allow an extension of federal debt ceiling into december. worries us would default on its have weighed stocks along with rising energy prices. next event in focus for global investors is payrolls data due friday anticipating that reasonable figure will mean reserve begin tapering massive stimulus program at november meeting. dollar was steady not too far month highs hit last against basket currencies held high euro. yield benchmark treasury notes off wednesday three half momentum are variable causing shifting risk appetite wrote westpac analysts us rates. action linked equity market gyrations hawkish fed outlook fears stagflation as oil surges politics around threaten domestic economy. spot gold little changed trading per ounce . lincoln feast.>



financialpost.com

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