HONG KONG – Asian stocks rallied Wednesday in light trading following gains on Wall Street and stabilization of crude oil.
KEEPING SCORE: Hong Kong’s benchmark Hang Seng index climbed 1.2 per cent to 22,080.37 while South Korea’s Kospi gained 0.3 per cent to 1,999.22. The Shanghai Composite Index in mainland China added 0.5 per cent to 3,668.45 and Australia’s S&P/ASX 200 rose 0.5 per cent to 5,141.80. Japanese markets were closed for a holiday.
ENERGY: Oil prices are staging a recovery that’s helping lift energy and material stocks. U.S. crude futures rose 30 cents, or 0.8 per cent, to $36.44 in electronic trading on the New York Mercantile Exchange. The contract closed up 33 cents to $36.14 a barrel Tuesday. Brent crude, which is used to price international oils, added 39 cents, or 1.1 per cent, to $36.50 a barrel in London. Prices for both contracts had fallen by more than a third over the past year but gains over the past day have provided hope to investors that the sector has hit bottom and is now stabilizing.
QUOTABLE: Steadier oil prices are making investors feel more bullish about energy companies and stock markets overall, said Jackson Wong, associate director at Huarong International Securities. “The selling pressure for these assets is lowered. And also a lot of people that sold these assets (earlier in the year) are buying toward the end of the year because of the low prices,” Wong said.
HOLIDAY CALM: Overall, most financial markets are expected to trade in a narrow range until the New Year as traders take time off and the flow of major economic releases slows dramatically over the holiday period. Wong said a lot of his clients were “already on their way to a long holiday.” He added that some fund managers are still buying in order to spruce up their portfolio with good quality stocks before the end of the year, but “I don’t see that they’re buying aggressively, that’s why the volume is low.”
WALL STREET: Major U.S. benchmarks posted gains for a second straight day. The Dow Jones industrial average rose 1 per cent to close at 17,417.27 and the Standard & Poor’s 500 index rose 0.9 per cent to 2,038.97. The Nasdaq composite rose 0.7 per cent to 5,001.11.
CURRENCIES: The dollar slipped to 120.94 yen from 121.01 in the previous day’s trading. The euro edged lower to $1.0938 from $1.0951.