Asian stocks rise amid falling oil prices and possible Xi-Biden meeting
- US crude falls 0.9%, Brent falls 0.6%
- Stocks Post Gains in Hong Kong, Korea and Australia
- Dollar and US benchmark yields pause near recent highs
- Investors look to US jobs data due Friday
HONG KONG, Oct. 7 (Reuters) – Asian stocks rallied on Thursday, supported by a possible easing of U.S.-China tensions and lower energy prices, as oil edged down from multi-year highs.
US and European futures also rebounded, with S&P 500 futures rising 0.52% and pan-regional Euro Stoxx 50 futures gaining 1.23% at the start of trading a day after the index fell. Euro STOXX 600 (.STOXX) by 1.03%.
The largest MSCI Asia-Pacific equity index outside of Japan (.MIAPJ0000PUS) rose 1.45%, which, if held up, would be the benchmark’s best daily performance since August .
Hong Kong (.HSI) led the gains in Asia. The index rose 2.41%, rebounding from its lowest close in 12 months, and was heading for its best day since August, although analysts remained cautious.
“It is too early to say this is part of a turnaround. Today there appears to be some bottom fishing and short covers going on, and a possible meeting between President Xi Jinping and President Joe Biden helps improve the mood, “said Steven Leung, senior manager. director of institutional sales at UOB Kay Hian in Hong Kong.
The United States and China have agreed in principle that their presidents will hold a virtual meeting before the end of the year, a senior US administration official said on Wednesday. Read more
Elsewhere, South Korean Kospi (.KS11) gained 1.6%, Australian stocks (.AXJO) rose 0.51%, and Japanese Nikkei (.N225) strengthened 0.72%, breaking eight days of losses.
However, there were still reasons for caution in the region, particularly with China on vacation, apparently contributing to a delay in moving towards a resolution for besieged developer China Evergrande (3333.HK).
Carlos Casanova, senior economist for Asia at UBP, said there were lingering concerns about China’s electricity crisis and its real estate market, as the government did not appear to be in a rush to intervene. even as the debt problems at Evergrande threatened to spread to the entire industry. . Read more
“There is contagion in the real estate sector at large, the authorities are not doing more to intervene, and therefore investors are trying to assess what this new threshold of pain means,” he said.
But he added that the improved mood in US-China relations, especially the more constructive tone of Commerce Chief Katherine Tai’s speech this week, had boosted the sense of risk.
Also supporting equities, oil prices moved away from multi-year highs reached a day earlier. A rally in oil prices had been a major contributor to a stock selloff this week.
US crude fell 0.93% to $ 76.71 per barrel. Crude fell overnight after hitting a seven-year high of $ 79.78 on Wednesday due to an unexpected increase in US crude inventories.
Brent crude fell 0.5% to $ 80.69 a barrel, after its three-year high of $ 83.47 also hit on Wednesday.
European and US natural gas prices also both slipped more than 10% overnight in volatile trading. European prices hit all-time highs early on Wednesday amid a continuing shortage of supply.
The recent surge in global gas prices – which helped push Asian LNG prices up 500% from a year ago – has left the entire energy sector subject to increased volatility, as power producers Europe and Asia always having to replenish their tight stocks before winter. . Read more
Falling energy prices and the apparent temporary deal to avoid a federal debt default contributed to a late rally on Wall Street. Read more
Global markets will then focus on expected wage data on Friday, with investors predicting that a reasonable figure will mean the US Federal Reserve will begin to scale back its massive stimulus program at its November meeting.
The dollar was stable, not too far from the 12-month highs reached last month against a basket of currencies, and held steady at a 14-month high against the euro.
The benchmark 10-year Treasury yield was 1.5398%, from a three-and-a-half-month high of 1.573% on Wednesday.
Spot gold fell 0.2% to $ 1,759.89 an ounce.
Editing by Lincoln Feast and Ana Nicolaci da Costa
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