Recovery In Oil Prices Fuels Rise Of Asian Stocks

Recovery In Oil Prices Fuels Rise Of Asian Stocks

Shares in Asia closed higher on Thursday, with the gains being traced to a recovery in crude oil prices. Brent crude was seen rising 1% to trade at $47.35 and U.S. crude was  up 0.4% to trade at $45.86 during Asian trading. Oil has settled down somewhat in the premarket this morning however.

A string of bullish economic data releases in the U.S. also continue to drive investor appetite for stocks abroad.

How did major Asian equity indices move?

In Japan, the Nikkei 225 (INDEXNIKKEI:NI225) rose 0.8%, supported by a weaker yen against the greenback. A weaker yen provides a low entry point into Japanese stocks for foreign investors in search of bargain investments. Growing expectations that the Bank of Japan will roll out bolder stimulus measures also aided shares in Tokyo.

There have been talks of Japan eventually doing helicopter money easing after the ruling coalition won a majority in the country’s upper-house. A constitutional modification will be needed if Japan is to adopt helicopter money policy, which means direct funding of government spending by the Bank of Japan, a policy that has led to hyperinflation in many countries in the past.

Shares in Taiwan closed higher as Optoelectronic, Iron & Steel and Electricity sectors led the Taiwan Weighted up 0.54%, which saw the index hit a new 52-week high.

In China, the Shanghai Composite rose 0.37% and the smaller Hang Seng Index (INDEXHANGSENG:HSI) in Hong Kong jumped 0.87% amid growing hope of accelerated stimulus measures. A meeting of financial leaders drawn from the world’s leading economies is set to take place in China over the weekend and discussions on how to cope with Brexit are expected to dominate the talks.

Malaysian shares bucked the Asian equity trend as the KLSE pulled back 0.4%. News of the U.S. Justice Department linking the country’s leadership to a scandal appeared to have triggered mass investor exit from the stock.

In Australia, shares closed higher with the S&P/ASX 200 moving up 0.44%, thus hitting a new 6-month high. Energy, Healthcare and Industrial stocks led the gains in Australia.