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Asia bourses mostly higher as crude oil surges

Monday 02.15 GMT

Overview

Markets around Asia were mostly higher, buoyed by a surge in oil prices and following on from another set of records for Wall Street on Friday.

Hot topic

Ahead of the Federal Reserve’s policy meeting on Wednesday, government bond yields are hovering at their highest levels in months. Of note, the yield (which moves inversely to price) on the benchmark 10-year US Treasury rose as much as 2.74 basis points in Asia to 2.4949 per cent, its highest intraday level since June 2014.

The yield on 10-year Japanese government bonds was up 0.9 basis point at 0.07 per cent, touching that level for the first time since February.

Bonds and other typically haven assets have sold off sharply since Donald Trump’s election as US president on the view that his economic policies will probably spur inflation, which is bad for fixed-income investments.

Equities

Japan’s Topix inched up 0.1 per cent, while the Nikkei 225 climbed 0.7 per cent — and is in positive territory for the year after momentarily turning positive for the first time in 2016 on Friday. Stocks, particularly those of exporters, have been buoyed by a weaker yen, which dropped 1.1 per cent on Friday and was unchanged on Monday at ¥115.28 per US dollar.

Australia’s S&P/ASX 200 was up 0.1 per cent, failing to benefit more from a strong performance by energy stocks, while Hong Kong’s Hang Seng dropped 0.6 per cent. China’s Shanghai Composite was down 0.8 per cent.

On Friday, the S&P 500 closed up 0.6 per cent higher at a record, along with the Dow Jones Industrial Average and Nasdaq Composite.

Forex

The South Korean won was the worst performer among Asian currencies, down 0.4 per cent following Friday’s vote by lawmakers to impeach President Park Geun-hye for her role in a corruption scandal that has gripped the nation.

Most Asian currencies were under pressure, with the US dollar index unchanged at 101.55 after gaining 0.5 per cent on Friday. The Australian dollar was up 0.1 per cent at $0.7465.

Commodities

Oil prices rallied more than 4 per cent in Asia morning trading following an agreement at the weekend by non-Opec members to cut production for the first time since 2001. That came on the heels of efforts by the cartel last month to cut supply as of January.

Brent crude, the international benchmark, was up 4.2 per cent at $56.62 a barrel while West Texas Intermediate gained 4.6 per cent to $53.85.

Gold was 0.1 per cent weaker at $1,158.11 an ounce.

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