TOKYO – Asian shares rose Tuesday, tracking the rally on Wall Street, as oil prices pushed higher amid hopes of an upcoming production-cut deal from the Organization of the Petroleum Exporting Countries.
KEEPING SCORE: Japan’s Nikkei 225 stock index was almost unchanged at 18,117.17 after dipping briefly following a powerful earthquake in northern Japan that triggered small tsunami but caused minor damage and injuries. South Korea’s Kospi rose 0.8 per cent to 1,981.56 and the Hang Seng in Hong Kong gained 1.3 per cent to 22,642.72. Australia’s S&P ASX/200 added 1.2 per cent to 5,417.80 and the Shanghai Composite Index climbed 0.3 per cent to 3,228.92. Shares in Southeast Asia and Taiwan also gained.
FOCUS SHIFTING: For the past couple of weeks, the main driver in markets has been the election of Donald Trump as the next U.S. president. In general, his victory has helped stocks and the dollar but weighed on bonds. But slowly attention is shifting onto other matters, including next month’s widely anticipated interest rate hike from the Federal Reserve.
OPEC LOOMING: Expectations are growing that oil ministers will agree at a production cut at a meeting of the OPEC oil cartel on Nov. 30 in Vienna, Austria. That’s helped buoy oil prices in markets. Benchmark U.S. crude rose 47 cents to $48.71 a barrel in electronic trading on the New York Mercantile Exchange. It jumped $1.88 to $48.24 a barrel on Monday. Brent crude, the international standard, rose 51 cents to $49.41.
ANALYST TAKE: “This is still not a done deal and although many of the countries involved are making the right noises we must not forget how challenging it will be to try to push a production cut deal through, with differing ambitions from the different parties involved. If no deal is reached we could expect oil to test $40 per barrel,” said Fiona Cincotta, market analyst at City Index.
RENMINBI RETREAT: Chinese authorities set the yuan’s official “parity rate,” known as the fix, for the country’s tightly controlled currency at 6.8779 on Tuesday, breaking a 12-day losing streak. The yuan, also known as the renminbi, has been weakening as the dollar has surged in value against other currencies.
CURRENCIES: The dollar rose to 110.71 yen from 110.43 yen on Monday. The euro slipped to $1.0631 from $1.0638.