Asian Stocks Gain Most in Three Weeks on Dovish Fed, Oil Rally

  • Traders see zero chance the Fed will raise rates in April
  • Drugmakers led gains in Asian shares to track global rebound

Making Sense of What a Strong Yen Means to Markets

Asian stocks rose, with the regional benchmark index heading for its biggest advance in three weeks, after oil jumped and Federal Reserve meeting minutes showed policy makers won’t rush to raise interest rates.

The MSCI Asia Pacific Index added 0.9 percent to 125.72 as of 4:02 p.m. in Hong Kong. Fed policy makers last month debated an April rate increase, with several officials leaning against such a move because it would send the wrong signal, minutes of the Federal Open Market Committee’s March 15-16 meeting said. Traders are assigning zero percent chance of the Fed increasing rates in April. U.S oil jumped 5.2 percent on Wednesday.

“We’ve got a fairly dovish Fed, and combined with the rally in crude, we’re seeing a positive performance in markets,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney. “Despite what should be an overall risk-on environment, caution remains across the region ahead of the U.S. earnings season.”

West Texas Intermediate crude’s biggest advance in three weeks on Wednesday followed an unexpected drop in U.S. crude inventories from the highest level in more than eight decades. The contract for May delivery added as much as 1.5 percent on Thursday.

Regional Gauges

Japan’s Nikkei 225 Stock Average rose 0.2 percent, snapping its longest string of losses since 2012, as rising crude oil prices boosted energy explorers. The Topix index finished 0.4 percent higher, erasing earlier losses of as much as 0.5 percent. The yen traded at 108.90 per dollar, its strongest level since October 2014, as expressions of concern from Japanese Chief Cabinet Secretary Yoshihide Suga failed to halt its gains.

South Korea’s Kospi index added 0.1 percent. Australia’s S&P/ASX 200 Index advanced 0.4 percent. New Zealand’s S&P/NZX 50 Index gained 0.3 percent. Singapore’s Straits Times Index climbed 0.1 percent. Hong Kong’s Hang Seng Index increased 0.3 percent. Taiwan’s Taiex index lost 0.3 percent.

China’s Shanghai Composite Index dropped 1.4 percent, the most since March 24. China’s economic rebound faces risks including inflation expectations triggered by rising pork prices and home-purchase curbs in top cities, according to a front-page commentary in the China Securities Journal.

Rakuten, ZTE

Inpex Corp. climbed 2.8 percent in Tokyo, pacing gains among energy producers. Online retailer Rakuten Inc. surged 7 percent after rival Amazon.com Inc.’s Japan unit said on Wednesday it would end free shipping on some orders. ZTE Corp. slumped 10 percent in Hong Kong after China’s second-largest maker of telecommunications gear resumed trading for the first time since March 4, after the U.S. government alleged it violated trade sanctions with Iran.

Drugmakers led gains in Asia, with Eisai Co. jumping 6.8 percent in Tokyo and Celltrion Inc. adding 3.3 percent in Seoul. The industry group’s advance follows a global rally in pharmaceutical stocks after Pfizer Inc.’s scuppered deal with Allergan Plc rekindled merger speculation in the industry.

E-mini futures on Standard & Poor’s 500 Index slipped 0.2 percent. The underlying U.S. equity benchmark index climbed 1.1 percent on Wednesday, the most in almost a month, as health-care and energy shares jumped.

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