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ASIA-MARKETS-UPDATE
Asian markets rise as energy firms are boosted by oil surge
HONG KONG, Sept 26, 2018 (BSS/AFP) – Most Asian markets rose on Wednesday,
with energy firms surging along with oil prices, as traders await the
conclusion of a key Federal Reserve policy meeting.
While worries about the China-US trade row continue to erode confidence,
the strong US economy and healthy corporate outlook are providing some
buoyancy for now.
The weekend decision by major producers from inside and outside OPEC to
maintain crude output — despite Donald Trump’s call for lower prices — has
sent both main contracts sharply higher this week.
Trump hit out at OPEC in his United Nations General Assembly speech
Tuesday, accusing it of “ripping off the rest of the world”.
Brent is sitting around four-year highs and WTI is heading close to that
mark, with a stronger dollar and an expected output cut from Iran caused by
US sanctions adding some lift.
“Oil prices remain in the bulls’ domain amid concern that US sanctions on
Iranian crude oil exports will result in much tighter physical market
conditions once they take effect in November,” said Stephen Innes, head of
Asia-Pacific trading at OANDA.
The two contracts edged up Wednesday after losses the previous day that
come on the back of a surprise gain in US stockpiles.
Energy firms shot sharply higher in Asia. CNOOC added 4.4 percent and
PetroChina piled on almost five percent in Hong Kong, while Sinopec jumped
2.4 percent. Inpex of Japan put on two percent and Australia’s Woodside
Petroleum added 1.5 percent.
The gains boosted broader markets. Hong Kong jumped 1.2 percent and
Shanghai ended 0.9 percent higher.
– Bitter trade dispute –
Mainland Chinese traders were also cheered by news that global equities
index compiler MSCI is considering quadrupling the weighting of Chinese
large-cap shares in its benchmark Emerging Markets Index over the next two
years.
Tokyo closed 0.4 percent stronger, Sydney rose 0.1 percent and Singapore
put on 0.7 percent, with Bangkok and Jakarta also up.
But Taipei and Wellington were flat while Manila and Mumbai fell.
With the Fed widely expected to raise interest rates Wednesday, governor
Jerome Powell’s post-meeting statement will be closely watched for clues
about its next move, with an eye on the increasingly bitter China-US trade
dispute.
“The US domestic economy is trotting along nicely; the rest of the world
is not in the same place and there’s no doubt that global investor caution is
continuing to increase as the trade war between the US and China appears to
be heating up,” Nick Twidale, chief operating officer at Rakuten Securities
Australia, said in a note.
“Analysts will be watching closely to see if the Fed acknowledges this and
its potential impact on the US.”
In early European trade London fell 0.2 percent, while Paris and Frankfurt
each lost 0.1 percent.
– Key figures around 0810 GMT –
Tokyo – Nikkei 225: UP 0.4 percent at 24,033.79 (close)
Hong Kong – Hang Seng: UP 1.2 percent at 27,816.87 (close)
Shanghai – Composite: UP 0.9 percent at 2,806.81 (close)
London – FTSE 100: DOWN 0.2 percent at 7,491.74
Euro/dollar: DOWN at $1.1768 from $1.1767 at 2015 GMT
Pound/dollar: DOWN at $1.3170 from $1.3181
Dollar/yen: DOWN at 112.85 yen from 112.96 yen
Oil – West Texas Intermediate: UP two cents cents at $72.30 per barrel
Oil – Brent Crude: UP 12 cents at $82.12 per barrel
New York – Dow Jones: DOWN 0.3 percent at 26,492.21 (close)
BSS/AFP/HR/1500