STOCD Santos Ltd

By Chao Deng 

Shares in Australia led markets in Asia higher Wednesday, as commodity prices stabilized.

The S&P/ASX 200 was up 0.7%, gaining for the sixth-straight day. Hong Kong's Hang Seng Index was up 0.1%, the Shanghai Composite Index was flat and South Korea's Kospi rose 0.4%.

Markets in Japan are closed for a national holiday to celebrate the emperor's birthday.

Energy shares have been some of the most beat up in the region, with the sector in the S&P/ASX 200 falling more than 11% this month amid a prolonged rout in oil prices. Shares like Woodside Petroleum Ltd. and Santos Ltd. have lost 36% and 54.7% respectively, compared with a 0.1% loss for the broader Australian market this month.

But the sector is starting to steady. In Australia, energy shares are up 2.7% this week, as U.S. oil prices surpass prices on the global market for the first time in four years. Some analysts say parity between the two benchmarks could signal the start of a recovery.

On Wednesday, Santos and Woodside each gained about 3% while the energy sector gained 1.1%.

The energy sector in the Hang Seng Index was up 0.6%, bringing its week-to-date gain to 2.1%. The sector is down more than 5% this month.

"The pause in the oil price and the weakness in the U.S. dollar appear to have helped equity markets overnight," wrote Angus Nicholson, a Melbourne-based analyst for broker IG, in a market note.

U.S. oil prices remain down more than 32% for the year but climbed 0.9% to $36.14 a barrel on Tuesday in New York. The Wall Street Journal's U.S. dollar index was last flat at 89.97 in the U.S. on Tuesday, though it lost as much as 0.2% overnight.

Mr. Nicholson said that the stabilization of the Chinese yuan this week may have taken some steam out of the dollar. China's central bank has guided its currency slightly stronger this week, after a several days of weakening. Still, the onshore yuan now sits just stronger than its record low against the U.S. dollar, reached in 2011.

The onshore yuan was last at 6.4752 to one U.S. dollar, compared with 6.4778 Tuesday. It reached as weak as 6.4836 to the dollar last week. Earlier, China's central bank guided the currency stronger for the third day in a row.

Traders and investors say concerns about U.S. high-yield debt and the energy sector have kept a lid on equity-market gains but U.S. stocks still rose overnight along with commodity prices.

That's even as data showed the U.S. economy expanded at a slightly slower pace than initially estimated in the third quarter. Gross domestic product grew at a 2.0% annual rate in the third quarter, less than its previous estimate of 2.1%.

In China, property shares were down 0.3%. The sector is cooling as investors temper their enthusiasm toward recent buying by domestic insurers in Chinese blue chips, including real-estate stocks.

Singapore's Noble Group Ltd. was up 3.4% after the commodities trader said Tuesday that it has reached an agreement to sell its remaining 49% stake in its agricultural unit to Chinese state-backed grain trader Cofco for $750 million. The disposal will likely stave off a liquidity squeeze for Noble, although the company continues to struggle under the weight of falling commodity prices and allegations of accounting regularities from earlier in the year.

Brent oil prices were last up 0.6% at $36.34 a barrel.

Gold prices were down 0.1% at $1,073.00 a troy ounce.

Sarah Kent contributed to this article.

Write to Chao Deng at Chao.Deng@wsj.com

(END) Dow Jones Newswires

December 22, 2015 21:24 ET (02:24 GMT)

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