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Asia markets solid as oil continues to climb

Thursday 06:00 GMT

Overview

Markets across Asia saw a day of solid gains as oil continued to trade higher following Opec’s decision to cut output for the first time since the financial crisis and as Japanese stocks benefited from recent weakness in the yen.

European bourses are expected to open little changed, with spreadbetters predicting the UK’s FTSE 100 will add 2 points to 6,785 and Germany’s Dax to drop 5 points to 10,635. US index futures suggest the S&P 500 will add just 2 points to 2,201, when trading gets underway later in New York.

Hot topic

Oil is commading attention after Opec members agreed on Wednesday in Vienna to cut supply by 1.2m barrels a day to 32.5m a day for six months from the start of January.

Brent crude, the international benchmark, was up 1.2 per cent at $52.44 a barrel in Asia, having gained 8.8 per cent on Wednesday. West Texas Intermediate was gained 1 per cent to $49.95 after gaining 9.3 per cent on Wednesday.

That has still been more than enough to fire up energy stocks across the region. Australia’s energy sector rose 7.2 per cent for its largest one-day gain since October 2008. The mining index for Japan’s Topix, which includes a number of large oil names, was up 10 per cent. Hong Kong’s energy sector rose 4.5 per cent.

In focus

There are plenty of economic data for investors in Asia to wade through, including a raft of readings on the manufacturing sectors of the region’s economies.

Japan’s manufacturing sector remains in expansionary territory, while the pace of contraction seen in Asean nations slowed slightly last month.

An official reading of China’s manufacturing and services sectors showed the pace of expansion quickened in November but a privately prepared reading of manufacturing that focuses on smaller private companies in China showed that the pace of growth had eased slightly.

Readings on capital expenditure for Japan and Australia both showed declines during the September quarter.

Forex

The Japanese yen, which last month suffered its biggest drop against the US dollar since 1995, was sitting 0.4 per cent stronger at ¥‎113.98 in afternoon trade in Asia, having been as much as 0.3 per cent weaker earlier in the day.

It sank 1.9 per cent on Wednesday as the US dollar index rose for the first time in five sessions. The dollar index — gauge of the greenback against a basket of currencies — was down 0.2 per cent on Thursday at 101.32.

Equities

Japan’s Topix trimmed early gains to be up 0.8 per cent, but still helped by the solid day for energy stocks. Australia’s S&P/ASX 200 closed 1.1 per cent higher, while Hong Kong’s Hang Seng has advanced 0.5 per cent. China’s Shanghai Composite was up 0.4 per cent.

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