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Asian markets track US equities higher

Wednesday 03.30 BST

What you need to know

  • Brent crude oil holds above $50
  • Australia dollar edges lower on consumer inflation
  • China Evergrande jumps 15% on profit forecast

Asia-Pacific equities took their lead from Wall Street after encouraging earnings propelled the S&P 500 to a record high and energy stocks rose as oil prices continued to climb following a pledge from Saudi Arabia to cut oil exports.

Hot topic

Australia’s S&P/ASX 200 was up 0.9 per cent as miners rallied after the price of copper hit a two-year high in London above $6,200 a tonne, supported by optimism over Chinese demand. Oz Minerals jumped as much as 8.2 per cent while Sandfire Resources rose as much as 8 per cent.

In Japan the Topix index was up 0.4 per cent as the financials sector climbed 0.9 per cent and the energy sector was up 1 per cent on higher oil prices.

Hong Kong’s Hang Seng Index was up 0.5 per cent as energy stocks gained, with that sector up 1.9 per cent. China Evergrande rallied as much as 15.3 per cent after the developer said it expects net profit for the six months to June to triple from the same period last year.

The Shanghai Composite was up 0.4 per cent while the Shenzhen Composite slipped 0.1 per cent.

The S&P 500 rose 0.3 per cent on Tuesday to a record closing high of 2,477, its first gain in four sessions.

Forex

The dollar index, a measure of the greenback against a basket of peers, was flat at 94.088, hovering at a 13-month low.

The market does not expect any change in interest rates by the Federal Reserve later in the global day on Wednesday, but analysts will be watching for any changes in language in the central bank’s statement.

Jingyi Pan, market strategist with IG, said the dollar held steady overnight while US Treasury yields rose and gold declined ahead of the Fed’s statement.

“The move does suggest cautiousness within the market, [that it is] unwilling to get overheated with selling the US dollar ahead of the meet, though in line with earlier thoughts, the likelihood of the Fed spinning the steering wheel on the current rhetoric may be slight in the upcoming ‘interim’ Fed meeting,” wrote Ms Pan in a note.

The Australian dollar weakened against its US counterpart to $0.7909 after consumer prices for the second quarter came in weaker than expected.

The euro was flat at $1.1648 after touching its strongest level since January 2015 on Tuesday. The Japanese yen was unchanged at ¥111.91.

Fixed income

The 10-year US Treasury yield, which moves inversely to price, was up 6.5 basis points at 2.323 per cent, while that for 10-year Japanese government bonds was 0.4 bp higher at 0.070 per cent. The yield on 10-year Australian sovereign bonds was up 4.8 bps at 2.735 per cent.

Commodities

Brent crude oil, the international benchmark, was up 0.7 per cent at $50.56 a barrel after settling 3.3 per cent higher on Tuesday in the wake of Saudi Arabia’s pledge to deepen cuts to crude exports in August. West Texas Intermediate, the US marker, was up 0.9 per cent at $48.34 a barrel.

Gold dropped 0.2 per cent to $1,248.22 an ounce.

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