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Asia bourses powered up by rising oil prices

Tuesday 02:40 BST

Overview

Energy stocks across Asia got a boost as crude oil prices continued to climb in response to an agreement between Russia and Saudi Arabia to extend production cuts, while currencies across the region gained on the dollar.

Hot topic

Equities markets were mostly higher in Asia, after a strong start to the week for Wall Street as oil prices jumped.

In Tokyo the Topix was up 0.5 per cent with energy and consumer staples in the lead. The Nikkei 225 was up 0.5 per cent and, at 19,973.27 points, nearing the 20,000-point mark for the first time since December 1, 2015.

In Sydney, the S&P/ASX 200 was up 0.3 per cent in Sydney as industrials climbed 1.5 per cent, followed closely by a 1.3 per cent rise for energy stocks.

However, Hong Kong’s benchmark Hang Seng Index was off 0.2 per cent, weighed down by a fall of 0.9 per cent for industrials.

Forex

Major currencies continued to advance on the US dollar in Asia, with the dollar index — a measure of the US currency’s strength against a basket of leading rivals — dropping 0.1 per cent to 98.857.

The South Korean won led the charge, gaining 0.5 per cent to Won1,117.95. The currency has strengthened 1.9 per cent against the greenback since the election of president Moon Jae-in last week.

The Australian dollar was up 0.2 per cent at $0.743, while the Japanese yen firmed 0.1 per cent to ¥1132.65.

Outside the region, Mexico’s peso was the strongest performer, gaining 0.4 per cent to 18.6367 per dollar as tumult erupted in Washington over President Donald Trump’s reported leaking of classified intelligence to Russian diplomats.

Fixed income

Asian sovereign bond yields, which move inversely to prices, fell as equities rallied on continued gains for oil prices. However, the yield on 10-year US Treasuries climbed 1 basis point to 2.334 per cent.

The 10-year Japanese government bond yield was up 1bp at 0.037 per cent while that on the equivalent Australian note was virtually unchanged at 2.584 per cent.

The region’s worst performer was the 10-year New Zealand government bond, whose yield rose 3 bps to 2.931 per cent.

Commodities

A rally in crude oil prices on Monday rolled on in Asia, pushing both major markers above key levels after Russia and Saudi Arabia backed the extension of oil output cuts earlier this week.

Brent crude, the global benchmark, was up 0.4 per cent at $52.05 a barrel, bringing it 2.3 per cent higher for the week.

West Texas Intermediate, the US marker, was up 0.5 per cent at $49.10 a barrel. It has gained 2.5 per cent since Friday’s close.

Gold was up 0.2 per cent at $1,232.65 an ounce.

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