Asian Stocks Climb as Oil Rally Spurs Gains in Oil Companies

  • Japan’s Topix post longest winning streak in more than a year
  • Energy companies rise as oil jumps on supply-cut deal hope

Are Global Stocks Overdue for a Correction?

Asian stocks advanced for a second day as a rally in oil prices drove energy companies higher and Japanese equities gained for a ninth day.

The MSCI Asia Pacific Index added 0.8 percent to 135.49 as of 4:16 p.m. in Hong Kong. A gauge of Asian energy shares surged the most in seven weeks as oil climbed after Iran and Iraq signaled that a group of oil producing countries would reach a supply-cut deal. Japan’s Topix index extended its longest run of gains since August 2015, overshadowing concerns over a magnitude 7.4 earthquake off the coast of Fukushima. Hong Kong’s Hang Seng China Enterprises Index rose the most since May to lead the region higher.

Asian stocks are down this month as Donald Trump’s Nov. 8 election victory deepened an outflow of funds from emerging markets on expectations for a U.S. interest-rate increase in December. All four major U.S. equity indexes rose to fresh records for the first time since 1999, fueled by optimism that the new administration’s policies will spur economic growth. Federal Reserve Chair Janet Yellen said last week that the central bank is close to lifting borrowing costs. Fed funds futures are showing a 100 percent chance of a U.S. rate hike next month, compared with a 68 percent probability in early November.

“There’s so many things that are contributing at the moment, the optimism around Trumponomics, and the fiscal stimulus that we have been asking for for years now,” said James Woods, a Sydney-based investment analyst at Rivkin Securities. “That is absolutely helping and also the U.S. earnings growth for the third quarter that beat the earnings recession. The U.S. economy is doing well and it’s a good sign for everyone else.”

The Topix climbed 0.3 percent, erasing earlier losses of as much as 0.2 percent. Japan issued its biggest tsunami warnings in five years after the earthquake struck at 5:59 a.m. local time Tuesday. The nation lifted the alerts before trading ended. The market will be shut on Wednesday for a holiday.

Five people were reported injured, mostly in northeastern Japan, according to the Fire and Disaster Management Agency. The weather agency warned aftershocks of a similar size could occur over the next week, triggering further tsunamis, public broadcaster NHK reported. A similar-sized quake struck the region two days before the March 2011 disaster that killed about 18,000 people.

The Hang Seng China Enterprises Index advanced 2.2 percent as China Oilfield Services Ltd. and PetroChina Co. surged at least 3.9 percent. The Hang Seng Index rose for a third day and the Shanghai Composite Index gained 0.9 percent to the highest close since Jan. 6.

Philippines Sinks

Equity gauges in Taiwan, South Korea and Australia increased at least 0.9 percent. The Philippine Composite Index sank 2.5 percent to an eight-month low, as property shares tumbled. The nation’s gauge formed a death cross after its 50-day moving average fell below its 200-day mean.

Futures on the S&P 500 Index gained were up 0.4 percent. American stocks reached fresh records as companies ended a five-quarter profit slump and Trump’s election fueled optimism that his plans to cut taxes and boost fiscal spending will benefit industries more geared toward economic growth. The S&P 500, the Dow Jones Industrial Average, the Nasdaq Composite Index and the Russell 2000 Index rallied together to all-time peaks for the first time since 1999.

West Texas Intermediate crude climbed 2.5 percent after reaching a three-week high in New York trading as Iran signaled optimism that OPEC will agree to a supply-cut deal and Iraq said it will make new proposals to help bolster unity before next week’s meeting in Vienna.

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