Recovery in crude oil prices, along with expectations of a healthy first quarter (Q1) results in USA, led Asian markets to make healthy gains on Tuesday. The Nikkei 225 gained 32.1 points, or 0.2%, to 16,906.54, on the back of a weaker yen. South Korea’s Kospi fell 0.3 percent and Hong Kong’s Hang Seng slid 0.9 percent.
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The gains in resources stocks came after BHP issued guidance before market open; the miner cut its guidance for fiscal 2016 iron ore production by 10 million tonnes to 260 million tonnes, pointing to adverse weather and the initiation of an accelerated rail network maintenance program.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.8 percent, brushing its highest since early November.
In contrast, safe-haven gold (XAU=) stayed in its well-worn $1,210-1,280 range since February and last stood at $1,247.36 per ounce, up 1.2 percent on the week. Freeport-McMoRan gained 83 cents, or 7.5 percent, to $11.85, while Newmont Mining rose $1.33, or 4.5 percent, to $30.79. The Dow is now up nearly 4 percent for the year, while the S&P 500 is up about 3 percent.
OIL PRICES: Crude has been at the heart of stock market moves this year and their rebound this week have been viewed as a sign that the global economic outlook has improved.
Reuters reported that thousands of Kuwaiti oil workers remained on strike for a third day on Tuesday to protest planned public sector pay reform. West Texas Intermediate (WTI) futures were at $40.20, 1.06% higher while globally-traded Brent was up 0.93% to $43.31 as of 2:29 AM EDT.
ENERGY PLAY: Investors bid up oil and natural gas drilling and production companies.
European stocks are down in morning trading, tracking their Asian counterparts, as a recent improvement in investor sentiment appeared to run out of steam.
Shares in Asia markets rose Tuesday, with Japan leading gains as the yen eased off recent strength.
In other energy trading, wholesale gasoline fell about 2 cents to $1.44 a gallon.
The euro was little changed at $1.1299, after sliding 0.5 percent on Wednesday, and Australia’s dollar advanced 0.3 percent. Volkswagen AG was 4.2 percent higher after Bloomberg reported that the German automaker has agreed to set aside at least $10 billion to resolve civil claims in the USA after it rigged diesel vehicles to cheat pollution controls. Three-month copper prices ended up 2.3 percent, zinc was up 2.3 percent, aluminum gained 1.1 percent and lead was up 2.7 percent.
Britain’s FTSE 100 was down 0.4 percent at 6,382.19 on Wednesday while Germany’s DAX dropped 0.2 percent to 10,324.79. The ZEW index rose more than expected to 11.2 points in April, from 4.3 in March.
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Oil has been one of the main drivers in financial markets this year, when it fell to 12-year lows amid concern about high supply and weakness in the global economy. A barrel of benchmark NY crude was up 67 cents at $40.45. The advance recouped Monday’s losses, when the benchmark tumbled 3.4%. That helped lift commodity currencies, and the Australian dollar briefly notched a high not seen since June at $0.7827.
