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Asia markets gain as crude prices improve

Thursday 03.10 BST

Overview

Asian markets were broadly up on Thursday as energy stocks gained on improvement in crude oil prices and New Zealand’s currency fell after the country’s central bank stood pat on interest rates.

Hot topic

The New Zealand dollar sank as much as 1.8 per cent against its US counterpart after the Reserve Bank of New Zealand held its key interest rate at a record low of 1.75 per cent and signalled it did not expect to raise rates until late 2019.

It had pulled back to trade down 1.7 per cent at $0.6825. The Australian dollar was also off 0.3 per cent at $0.7343.

South Korea’s won was among the only currencies to make gains in the region, rising 0.2 per cent to Won1,133.4 per dollar following Wednesday’s inauguration of President Moon Jae-in.

Outside the region the Canadian dollar shed 0.7 per cent against the greenback to C$1.3733 after Moody’s downgraded its ratings for six Canadian banks.

The dollar index tracking the greenback against a basket of peers was flat at 99.642.

Equities

Markets in the region were largely up as energy stocks enjoyed a boost from improved crude prices.

In Sydney the S&P/ASX 200 was up 0.7 per cent as energy stocks climbed 1.1 per cent. Shares in major banks were recovering from a drop brought on by a new levy announced on Tuesday night, with National Australia Bank up 1.1 per cent.

Tokyo’s Topix was off 0.1 per cent, with a 0.8 per cent drop from the real estate segment offsetting gains of 0.7 per cent in telecoms stocks.

In Hong Kong, the Hang Seng was up 0.4 per cent, with state-owned Chinese oil companies helping to boost the energy segment 0.5 per cent.

Shares in Noble Group fell as much as 16.2 per cent on Thursday ahead of the company’s first-quarter results later in the day. Earlier in the week the commodities trader warned of a looming $130m in the first quarter due to a misplaced bet on coal prices. The FTSE Straits Times index was up 0.6 per cent.

Fixed income

Bonds market moves were largely muted in the region, with the exception of New Zealand sovereign bonds. Yield, which moves inversely to price, on the 10-year New Zealand note was down 4 basis points at 3.006 per cent after the central bank signalled a benign inflation outlook.

Yield on the 10-year Australian note was flat at 2.653 per cent, while that on 10-year Japanese sovereign bonds was up 1bp at 0.032 per cent.

US Treasuries were making mild gains, with yield on the 10-year note down 3bp at 2.3891 per cent.

Commodities

Oil prices were consolidating gains from a late-day rally on Wednesday that pushed Brent crude, the international benchmark, back above the $50-a-barrel mark.

Brent was up 0.3 per cent in Asia trading at $50.34 a barrel. West Texas Intermediate, the US marker, was up 0.3 per cent at 47.49 a barrel.

Gold was up 0.1 per cent at $1,219.85 an ounce.

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