Brent crude oil rose above $50 a barrel for the first time in almost seven months on Thursday but Asian shares struggled to gain traction, with worries about US interest rates and China’s slowing economy keeping many investors on the sidelines.
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Futures on Hong Kong’s Hang Seng Index rose 1 percent and contracts on the Hang Seng China Enterprises Index climbed 1.1 percent.
Global influences offered important and substantial support to the Hong Kong market with the US S&P 500 index strengthening by over 1.35% for the day despite higher bond yields and expectations of rising interest rates.
Asian shares look set to extend their recovery from 12-week lows on Thursday after renewed optimism on European banks’ prospects and a rise in oil prices to near $50 a barrel helped lift global shares.
A good number of investors remained doubtful the US central bank will go on hiking its short-term interest rates by early June despite the sluggish markets, and even following the hawkish comments by three central bank officials.
Tokyo-listed Inpex also jumped 2.5 per cent and JX Holdings advanced 1.4 per cent.
Australian stocks also popped, with shares receiving an additional boost from a relatively weaker yen against the dollar.
Asian stocks jumped on Wednesday (May 25) after a strong lead from Wall Street and Europe, and as investors adjusted to the prospect of a U.S. rate rise in the near future.
In Asian trade on Friday morning, Tokyo’s Nikkei 225 gained 0.56 per cent, or 93.41 points, to 16,865.87.
The US Department of Energy said Wednesday that US commercial crude oil inventories fell by 4.2 million barrels in the week to May 20.
In Europe, a round of new rescue loans for Greece was unfrozen, eliminating the risk the country will default on its debts in the next few months. Goldman Sachs previous year projected oil could drop to as low as $20 a barrel, and the sinking price was a key worry for stock investors globally.
In Australia, Wesfarmers shares fell 0.2% The company said in a statement that it will take impairment charges up of to 2.15 billion Australian dollars in fiscal 2016 due to poor market conditions and lower coal prices. Bayer’s offer valued Monsanto at $122 per share.
“The market’s focus is returning to the Fed, given rising expectations that they could hike rates much earlier than expected”. Leading the upside on a down day were oil-driller China Shenhua (1088:HK), up 6.08%; followed by sanitary-napkin maker Hengan International (1044:HK), up 5.00%; and then PetroChina (857:HK), up 3.90%. The smaller Shenzhen Composite Index rose 0.5%, and the Nasdaq-style ChiNext index climbed 0.9%.
OVERSEAS: Germany’s DAX advanced 1.6 percent.
RETAIL RISES: Retailers have tumbled in recent weeks as they’ve reported weak earnings.
It last stood at 0.903 percent, nearly a quarter percentage point above this month’s low of 0.686 percent.
The prospects of higher US interest rates undermined the attraction of gold XAU=, which fell to a seven-week low of $1,217.90 per ounce and last stood at $1,222.40.
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But it saw a 0.5 percent loss against the yen to 109.64 yen in early Asian trade in an erratic move. The euro inched up to $1.1163 from $1.1143.
