Stocks in Asia rose higher, climbing to a fresh-two year high on Tuesday, while oil extended gains after major producers, Saudi Arabia and Russia agreed to an extension of supply cuts until 2018.
Stock benchmark indexes in Australia and Japan climbed, offsetting losses in China shares, after the S&P 500 Index closed above 2,400 for the first time. Crude rose for a fifth day, topping $49 a barrel as Saudi Arabia and Russia extending output cuts will probably influence other countries to follow. Shenzhen shares increased while those in Shanghai erased an earlier decline after the closing of a global summit in Beijing. The yen fortified with the Mexican peso and South Korean won.
The surge in oil is keeping the global stocks bullish even as concern rises over the strength of the global economy. Chinese industrial production and retail data came in weaker than expected Monday, after American retail sales and inflation also cast a shadow on growth. Financial markets have also gotten a boost from China’s sweeping plan to improve global infrastructure.
“At the moment we are taking inspiration from the higher oil price and what it means for energy prices across the world; what it means for (capital expenditure); and what it means for reflation — and of course the market loves reflation,” said Chris Weston, a chief market strategist in Australia.
Main Moves in Financial Markets
The MSCI Asia Pacific Index increased 0.2 percent as of 10:54am in Tokyo, heading for the highest closing level in 2 years. Japan’s Topix rose 0.3 per cent, while the Nikkei 225 Stock Average climbed to within two points of reaching 20,000 before pulling back. Australia’s S&P/ASX 200 climbed 0.2.
China shares traded in Hong Kong retreated 0.6 percent after surging 1.6 percent on Monday following optimism over Beijing’s infrastructure spending program. The Shanghai Composite Index slumped 0.7 per cent and the Hang Seng Index lost 0.3 percent.
Oil added 0.6 per cent to US$49.12 a barrel, after surging 2.1 per cent on Monday while Gold gained 0.3 percent to US$1,234.61 an ounce, rising for a fourth straight sessions.
The yen rose 0.2 percent to 113.52 per US dollar, after dropping 0.4 percent on Monday. The South Korean won increased 0.4 percent to the highest since April 4, while the Mexican peso added 0.3 percent.
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