Asian Shares Higher as Oil Recovers -- Update
23 December 2015 - 5:05PM
Dow Jones News
By Chao Deng
Shares in Australia led markets in Asia higher Wednesday, as
commodity prices stabilized.
The S&P/ASX 200 was up 0.6%, gaining for the sixth straight
day. Hong Kong's Hang Seng Index was up 1.1%, the Shanghai
Composite Index was up 0.2%.
South Korea's Kospi rose 0.5%.
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 nearly 11% this
month amid a prolonged rout in oil prices. Shares like Woodside
Petroleum Ltd. and Santos Ltd. have each lost roughly 8% this
month, compared with a 0.4% loss for the broader Australian market
over the same period.
But the sector is starting to steady. In Australia, energy
shares are up 3.2% this week, as U.S. oil prices surpass prices on
the global market for the first time in four years. Some analysts
said parity between the two benchmarks could signal the start of a
recovery.
On Wednesday, Santos was down 0.5%, but Woodside was up 1.3%,
while the energy sector gained 1.4%.
The energy sector in the Hang Seng Index was up 3.5%, bringing
its week-to-date gain to 4.1%. The sector is down more than 2% 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 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
several days of weakening. Still, the onshore yuan now sits just
stronger than its record low against the dollar, reached in
2011.
The onshore yuan was last at 6.4752 to a 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 said 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 is 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 edged higher with buying by insurers
sparking wider speculative interest.
Suzhou TFC Optical Communication rose 10% after Zhongrong Life
Insurance raised its stake in the firm to 5%. Analysts said
investors appear to expect China to further cut interest rates,
pushing money out of bonds and into stocks.
"Insurance funds, marked by high cost, are seeking higher yields
from the equity market due to limited alternative investment
channel," said Soochow Securities analyst Deng Wenyuan.
Singapore's Noble Group Ltd. was up 2.3% after the commodities
trader said Tuesday 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 irregularities from earlier in
the year.
Brent oil prices were last up 0.9% at $36.45 a barrel.
Gold prices were down 0.1% at $1,072.80 a troy ounce.
Yifan Xie and Sarah Kent contributed to this article.
Write to Chao Deng at Chao.Deng@wsj.com
(END) Dow Jones Newswires
December 23, 2015 00:50 ET (05:50 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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