BackAsian stocks join rebound in surge from 3-year low; oil above $30
The MSCI Asia Pacific Index climbed 2%, halting a seven-day drop that marked its longest run of losses since August
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Wellington: Asian stocks rallied from a three-year low, tracking a rebound in the US amid speculation a selloff that erased more than $5 trillion from global equity values this year had gone too far. Oil rose for the first time this year and the offshore yuan strengthened for a fifth day.
The MSCI Asia-Pacific Index climbed the most in four weeks as benchmark share indexes rallied across the region. US index futures gained after the Standard & Poor’s 500 Index advanced for a second day. Treasuries took back some of the last session’s gains, which were spurred by crude’s decline to below $30 for the first time in 12 years. The more positive sentiment diminished the appeal of haven currencies, with the yen retreating as Australia’s dollar appreciated.
The S&P 500’s rebound from its lowest level since September has provided a shot in the arm for equity markets, which have been beaten down in 2016 amid concern over China’s ability to manage its slowing economy and the impact of sliding crude prices. Asian energy producers rallied from a seven-year-low as industry data indicated a drop in US oil stockpiles. China helped stabilize investor confidence in recent trading sessions by intervening to shore up the yuan and trade data showed exports unexpectedly rose for the first time in six months.
“We’ve seen some stability in the US and other markets but sentiment will really depend on what’s happening in China with regard to the direction of their currency and economic data," James Lindsay, an Auckland-based fund manager at Nikko Asset Management Co., which manages $160 billion globally, said by phone. “If we see continued weakness in the yuan, that will have a huge flow-on effect for the rest of the world."
Stocks
The MSCI Asia Pacific Index climbed 2% as of 11:02 am Tokyo time, halting a seven-day drop that marked its longest run of losses since August. Japan’s Topix index rallied from its lowest level since September, advancing 2.7% and Hong Kong’s Hang Seng Index rose 2.3%. Futures on the S&P 500 added 0.9%, after the benchmark gained 0.8% on Tuesday.
China’s exports in December increased 2.3% from a year earlier in yuan terms, widening the trade surplus to 382 billion yuan ($58 billion). Economists forecast a 4.1% drop, a Bloomberg survey showed.
Commodities
West Texas Intermediate crude rose 1.9% to $31.03 a barrel, after slipping as low as $29.93 on Tuesday. It’s still down 16% this year.
American oil supplies fell 3.9 million barrels last week, the industry-funded American Petroleum Institute was said to have reported late Tuesday. Inventories probably expanded by 2 million barrels, according to a Bloomberg survey of analysts before the Energy Information Administration report Wednesday.
Currencies
Japan’s currency, which has benefited from demand for haven assets this year, dropped 0.5% to 118.29 per dollar. The euro weakened 0.4%, as did the Swiss franc.
High-yielding currencies led gains, with the Australian and New Zealand dollars strengthening at least 0.7%. The South African rand, which tumbled as much as 9% to a record low at the beginning of the week, rallied 1.3%.
The yuan strengthened 0.15% in Hong Kong’s offshore market, where it was headed for the biggest five-day advance on record. Higher oil prices supported the ringgit, which gained 0.6%. Malaysia is Asia’s only major net oil exporter. Bloomberg
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