Asian Shares Mostly Higher
Energy shares rise after overnight recovery in oil prices, but Brent slips in early Asia trading
Markets in Asia rose Wednesday as a recent recovery in oil prices in the U.S. lifted energy shares slightly.
Australia’s S&P/ASX 200 was up 1%, while the Nikkei Stock Average was up 0.4%. Shares in Australia were up for the ninth straight session with the energy sector gaining 1.5%.
But the Shanghai Composite Index was flat, and Hong Kong’s Hang Seng Index and South Korea’s Kospi slipped by 0.4% and 0.1% respectively.
In Singapore, Noble Group Ltd.’s stock fell 6.8% after Moody’s Investors Service slashed the commodities firm’s credit rating to junk status. It was another blow for the firm, which has struggled this year amid allegations of accounting irregularities and a slump in commodities prices. Shares have plunged 64% this year.
U.S. stocks rose Tuesday, as investors bought shares of some of the year’s biggest decliners, including energy stocks. Brent crude oil prices are down more than 30% for the year, but gained 2.4% on Monday in the U.S.
The region has been volatile in recent weeks, amid a broad slide in commodity prices, trouble in the high-yield debt market, lackluster global economic growth and the U.S. Federal Reserve’s first interest rate rise in nearly a decade. A recovery in oil and natural gas prices in recent days has added momentum to recent sessions.
“The psyche of the market is still very negative on everything,” said Andrew Sullivan, managing director at Haitong International Securities, adding that any further declines in oil could weigh on stocks in the near term.
Trading volumes are also thinning as the year draws to a close. Financial markets in Asia, the U.S., and Europe will be closed Friday for New Year’s Day.
The MSCI Asia Pacific is on track to lose 4.4% this year. The region, along with global markets, had volatile summer, rattled by a stock crash in China and the surprise devaluation of the yuan.
Markets in Southeast Asia, Hong Kong and India are down most in the region this year. Thailand’s SET has lost 14%, the Hang Seng Index is down 6.8% and India’s Sensex is down 5%.
By comparison, the S&P 500 is up 1% for the year to date while the Dow Jones Industrial Average is down 0.6%.
Still, further easing in China, corporate growth in Japan and a recovery in the U.S. are some things investors can look forward to in the coming year, Mr. Sullivan said.
“The news is getting better” for the Asia region, he said.
Brent crude oil was last down 1.3% at $37.32 a barrel in Asia trade Wednesday.
Gold prices were up 0.2% at $1070 a troy ounce.
Source: WSJ – Asian Shares Mostly Higher
