Asian Stocks Advance as Energy Producers Rally With Crude Oil

  • Oil rise above $48 a barrel on forecasts U.S. crude stockpiles
  • Chinese shares traded in Hong Kong gain as Xi vows reforms

Asian stocks climbed for a second day as a rally in oil prices drove energy shares from Japan to Taiwan higher. 

The MSCI Asia Pacific Index added 0.8 percent to 127.33 as of 4:26 p.m. in Hong Kong. The pickup in commodity prices is helping a recovery in global equities, after weaker economic data and disappointing company earnings wiped out almost $2 trillion of value in the first two weeks of May. The Bloomberg Commodity Index approached a six-month high as oil climbed above $48 a barrel.

“Markets seem to be in a relatively sweet spot with a steadily stronger U.S. dollar and resilient commodities prices,” Angus Nicholson, a Melbourne-based market analyst at IG Ltd., said by e-mail. “Many investors have been predicting a pullback in markets, but despite all the negativity, markets have continued to grind higher.”

Taiwan’s Taiex index increased 0.9 percent as Formosa Petrochemical Corp. led the TWSE Oil Electricity and Gas Industry Index to the biggest gain among industry groups. Japan’s Topix index climbed 1.1 percent as a weaker yen aided exporters. Australia’s S&P/ASX 200 Index increased 0.7 percent. New Zealand’s S&P/NZX 50 Index rallied 0.9 percent. Hong Kong’s Hang Seng Index added 1.2 percent. South Korea’s Kospi index was little changed.

China’s Reforms

Chinese stocks traded in Hong Kong rose the most in a month as President Xi Jinping vowed to press ahead with plans to cut capacity at state-owned enterprises. The Hang Seng China Enterprises Index of mainland companies traded in the city increased 1.4 percent. The Shanghai Composite Index finished 0.3 percent lower.

China’s reform drive aims to improve supply quality and overhaul areas including pricing, taxation, finance and social security, the Xinhua News Agency cited President Xi as saying at a government meeting. His comments come amid record crude steel output in April, with the industry boosted by easier credit and efforts to shore up economic growth.

Singapore’s Straits Times Index surged 1.8 percent, leading advances among Asia-Pacific indexes, with oil-rig builder Sembcorp Marine Ltd. pacing the gains. The worst may soon be over for the offshore and marine engineering sector amid rising crude prices, according to Deutsche Bank AG.

Energy Shares

BHP Billiton Ltd., the world’s biggest mining company and Australia’s top energy producer, climbed 3.5 percent in Sydney. Mitsubishi UFJ Financial Group Inc. rose 1.3 percent as a plan to buy back its own shares outweighed a profit forecast that missed analyst estimates. Advanced Info Service Pcl, the Thai phone company controlled by Singapore’s Temasek Holdings Pte, surged 8.9 percent in Bangkok after True Corp Pcl pulled out from the government’s 4G mobile license auction.

Futures on the S&P 500 Index rose 0.2 percent. The U.S. equity benchmark index gained 1 percent on Monday as energy shares advanced. Apple Inc. jumped the most since March after Warren Buffett’s Berkshire Hathaway disclosed a stake in the world’s most valuable company.

West Texas Intermediate crude rallied as much as 1.5 percent Tuesday after surging 3.3 percent on Monday. Goldman Sachs Group Inc. said the market moved into deficit earlier than expected following supply disruptions in Nigeria and an increase in demand.

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