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Asian markets rise as energy firms are boosted by oil surge

Sep 26, 2018 06:19 AM GMT+0530 | 0 Comment(s)

AFP - Most Asian markets rose on Wednesday with energy firms surging with oil prices, while traders await the conclusion of a key Federal Reserve policy meeting.

While worries about the China-US trade row continue to claw at confidence, the strong US economy and healthy corporate outlook are providing some buoyancy for now.

The weekend decision by major producers from inside and outside OPEC to maintain output -- despite Donald Trump's call for lower prices -- has sent both main contracts sharply higher this week.

Trump hit out at OPEC in his United Nations General Assembly speech Tuesday, accusing it of "ripping off the rest of the world".

Brent is sitting around four-year highs and WTI is heading close to that mark, with a stronger dollar and an expected output cut from Iran caused by US sanctions adding some lift.

"Oil prices remain in the bulls' domain amid concern that US sanctions on Iranian crude oil exports will result in much tighter physical market conditions once they take effect in November," said Stephen Innes, head of Asia-Pacific trading at OANDA.

And while prices were slightly lower Wednesday following a surprise gain in US stockpiles, energy firms shot higher.

CNOOC and PetroChina piled on almost four percent in Hong Kong while Sinopec jumped 2.7 percent. Inpex of Japan put on 1.4 percent and Australia's Woodside Petroleum added a similar amount.

The gains boosted broader markets.

Hong Kong jumped one percent, Shanghai climbed 0.8 percent and Tokyo ended the morning 0.1 percent higher.

Sydney rose 0.1 percent and Singapore put on 0.4 percent but Taipei and Wellington were slightly off.

With the Fed widely expected to lift interest rates Wednesday, governor Jerome Powell's post-meeting statement will be closely watched for clues about its next move, with an eye on the increasingly bitter China-US trade spat.

"The US domestic economy is trotting along nicely; the rest of the world is not in the same place and there's no doubt that global investor caution is continuing to increase as the trade war between the US and China appears to be heating up," Nick Twidale, chief operating officer at Rakuten Securities Australia, said in a note.

"Analysts will be watching closely to see if the Fed acknowledges this and its potential impact on the US."

- Key figures around 0230 GMT -

Tokyo - Nikkei 225: UP 0.1 percent at 23,953.98 (break)

Hong Kong - Hang Seng: UP 1.0 percent at 27,761.33

Shanghai - Composite: UP 0.8 percent at 2,802.12

Euro/dollar: DOWN at $1.1762 from $1.1767 at 2015 GMT

Pound/dollar: DOWN at $1.3176 from $1.3181

Dollar/yen: DOWN at 112.92 yen from 112.96 yen

Oil - West Texas Intermediate: DOWN 26 cents at $72.02 per barrel

Oil - Brent Crude: DOWN 23 cents at $81.64 per barrel

New York - Dow Jones: DOWN 0.3 percent at 26,492.21 (close)

London - FTSE 100: UP 0.7 percent at 7,507.56 (close)


 

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