Asian Stocks Gain After OPEC Output Deal as Energy Shares Climb

  • OPEC to cut production with details worked out in November
  • India attack on terror camps in Pakistan pushes down stocks

Asian stocks rose after an agreement by OPEC to cut production pushed up a regional gauge of energy shares by the most since March.

The MSCI Asia Pacific Index gained 0.5 percent to 141.52 as of 4:08 p.m. in Hong Kong, set for its best quarter since the first three months of 2012, while the measure of energy companies jumped 3.5 percent to the highest in more than a year. The first output cut by the Organization for Petroleum Exporting Countries in eight years boosted the oil price by 5.3 percent on Wednesday. India’s S&P BSE Sensex Index fell 1.1 percent on Thursday after the nation said it carried out surgical strikes on terrorist camps in Pakistan.

The production cut surprised traders who had expected the group to continue its pump-at-will policy adopted in 2014. OPEC agreed to limit output to a range of 32.5 million to 33 million barrels per day following a meeting in Algiers. Many of the details still need to be worked out and the group won’t decide on targets for each member country until its next gathering at the end of November. A global glut has weighed on prices for the past two years.

“The energy sector is going to be a key contributor to the rally we see after the OPEC decision,” said Tony Farnham, a Sydney-based strategist at Patersons Securities Ltd. “All we’ve seen at this stage is the intention to do something. I’d like to see it more concrete, and then still they have to abide by it. But, it is the first step.”

With OPEC out of the way, investors’ attention in the last quarter of the year is expected to swing back to monetary policy. Federal Reserve Chair Janet Yellen told lawmakers Wednesday that most Federal Open Market Committee members expect a rate increase this year.

South Korea’s Kospi index closed 0.8 percent higher. Posco Daewoo Corp. gained 13 percent, the most in seven months, on expectations it will benefit from rising oil prices. The company’s gas field in Myanmar accounts for about 70 percent of the company’s earnings, said Park Jong Ryeol, an analyst at HMC Investment Securities Co.

Taiwan Reopens

Australia’s S&P/ASX 200 Index rose 1.1 percent and New Zealand’s S&P/NZX 50 Index added 0.7 percent. Taiwan’s Taiex index climbed 0.8 percent as financial markets opened after being closed for two days because of Typhoon Megi. The island’s central bank held its benchmark interest rate at 1.375 percent.

Hong Kong’s Hang Seng Index rose 0.5 percent for its third day of gains. The gauge has rallied 14 percent this quarter, the most in Asia, buoyed by inflows from the mainland via an exchange link with Shanghai. The Shanghai Composite Index added 0.4 percent. Mainland Chinese markets will be shut next week for holidays.

The Philippine Composite Index jumped 1.7 percent, the most in two weeks, and Thailand’s SET Index advanced 0.9 percent.

Futures on the S&P 500 Index gained 0.1 percent. The U.S. equity benchmark index rose 0.5 percent Wednesday, closing above its average price during the past 50 days for the first time in almost a week as oil companies Exxon Mobil Corp. and Chevron Corp. jumped.

West Texas Intermediate crude futures declined 0.3 percent Thursday after their jump the day before. The deal to cut production was possible because Iran will be exempt from capping output, a major concession by Saudi Arabia, the group’s dominant producer.

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