Dhaka, Bangladesh
Asian markets boosted by energy firms

Asian markets boosted by energy firms

HONG KONG, Apr 19: Asian markets enjoyed another day of gains Thursday as energy firms tracked a surge in oil prices, while fears over Syria and a possible China-US trade war eased, reports AFP. Fresh hopes that Donald Trump and North Korea’s leader Kim Jong Un will hold a historic summit within months also provided some much-needed optimism. Both main crude futures rallied almost three percent Wednesday on the back of data showing a drop in US stockpiles—indicating improved demand—and expectations that a Russia-OPEC output cap deal will be kept in place. Adding to the gains was talk that OPEC kingpin Saudi Arabia wanted to see crude at around $80 a barrel as it prepares for a gigantic listing of part of its state oil company. Tensions in the oil-rich Middle East are also keeping prices elevated. Brent and WTI, which are now sitting at levels not seen since the end of 2014, edged up further in Asia. Energy firms across the region were boosted, with Hong Kong-listed PetroChina up more than five percent and CNOOC 3.5 percent higher. Woodside Petroleum added one percent in Sydney and Inpex put on a similar amount in Tokyo. “That surprise draw on inventories in the US appears to have changed the game despite the fact that we did see an increase in US production. The market has looked past that,” said Michael McCarthy, an analyst at CMC Markets in Sydney. “With that increasing demand and some concerns about (the) supply side, a number of traders have been blindsided by this recent move.” Tokyo stocks closed marginally higher on Thursday after a joint post-summit news conference by Japanese Prime Minister Shinzo Abe and US President Donald Trump delivered few surprises. The benchmark Nikkei 225 index rose 0.15 percent, or 32.98 points, to 22,191.18 while the broader Topix index was marginally higher, adding 0.51 points to 1,750.18. “It shows that sentiment is largely positive that the Nikkei managed to close in positive territory for the fifth straight day,” said Makoto Sengoku, market analyst at Tokai Tokyo Research Institute. Investors were relieved that “the Abe-Trump summit gave no positive surprise but no negative surprise either”, he told AFP. The market focus will now move to corporate earnings, he added as the earnings season gets underway in Japan next week. At the news conference in Florida broadcast shortly before the opening bell in Tokyo, a reluctant Abe said Tokyo was ready to begin talks about “trade deals” with the US, but stopped short of committing to a bilateral deal. The dollar edged up to 107.40 yen from 107.25 yen in New York late Wednesday. In stocks trade, banks were higher with Mitsubishi UFJ Financial up 1.26 percent at 714.4 yen. Some exporters gave up early gains to close lower as investors locked in profits. Toyota ended down 0.20 percent at 6,923 yen, Panasonic was down 0.50 percent at 1,567.5 yen and Olympus slipped 0.37 percent to 4,010 yen. Hong Kong and Singapore each gained more than one percent and Shanghai added 0.8 percent. Sydney and Seoul both climbed by 0.3 percent. Taipei, Wellington and Jakarta were also higher. In early European trade London and Paris each rose 0.2 percent but Frankfurt dipped 0.1 percent. The positive trading environment is a far cry from the unease felt at the start of the week after US-led strikes on Syrian targets—in response to an alleged chemical attack—sparked worries of a confrontation with Russia, which is an ally of the Damascus regime. However, reports have suggested Russian President Vladimir Putin is looking to ease tensions as he faces fresh sanctions. China’s announcement of a timetable to remove restrictions on foreign ownership in its car market, the world’s biggest, also lifted optimism that a simmering trade war with the United States can be avoided. Tough rules on doing business in the country’s auto sector had been a major source of anger for Trump, who has already threatened tariffs on billions of dollars of Chinese imports in recent weeks as part of his “America First” protectionist agenda. However, in its quarterly report on the US economy, the Federal Reserve warned there were concerns about the trade tensions among businesses and farmers, who had seen prices rise already. The central bank’s Beige Book report said the world’s top economy continued to see moderate growth and it expected to lift interest rates twice more this year, having already hiked in March. “The biggest dynamic in the market right now is the growth story,” Sandip Bhagat, chief investment officer at Whittier Trust, told Bloomberg TV. “We’re in the midst of a synchronized global recovery in growth and corporate profits are rising,” he added. Trade wars, tariffs and inflation worries are just “distractions”. On currency markets, the pound struggled to bounce back against the dollar after diving from post-Brexit vote highs on data showing a surprise drop in British inflation. And the upbeat sentiment across markets has provided support to the greenback against the safe haven yen. US stock index futures edged lower on Thursday, as the effect of higher oil prices was offset by declines in chipmakers, following a weak forecast from Taiwan Semiconductor, the world’s largest contract chipmaker. Shares of Apple were also off 1.3 percent in premarket trading. Brokerage Mizuho Securities USA said weak demand for iPhone 8 models could dent the company’s third-quarter forecast. At 7:03 a.m. ET, Dow e-minis 1YMc1 were down 23 points, or 0.09 percent, S&P 500 e-minis ESc1 fell 4 points, or 0.15 percent and Nasdaq 100 e-minis NQc1 dropped 12.25 points, or 0.18 percent. Taiwan Semiconductor, which is also an Apple supplier, lowered its own full-year forecast due to softer demand for smartphones and cut its outlook for global semiconductor industry growth this year. TSMC’s shares fell 4.3 percent, leading a host of chipmakers lower. Among them AMD and Nvidia fell about 1.6 percent, while Intel was off 0.4 percent. Still not all reports were gloomy. American Express was up 3.6 percent after the credit card issuer easily topped Wall Street profit estimates. Alcoa rose 5.4 percent after the aluminum producer reported strong results and raised it full-year earnings forecast. Shares of metals including aluminum, nickel and iron ore have soared in the aftermath of U.S. sanctions on major Russian aluminum producer Rusal, driving up commodities and resources stocks globally. Of the 52 companies among the S&P 500 that have reported first-quarter earnings through Wednesday, 78.8 percent topped profit expectations, according to Thomson Reuters data. Overall profits at S&P 500 companies is expected to have increased 19.4 percent in the first quarter, the biggest in seven years. Oil prices rose to their highest since late 2014 after sources told Reuters top exporter Saudi Arabia would be happy to see crude rise to $80 or even $100 a barrel and as U.S. crude inventories declined.

Share |