Asian markets up after Wall St rallies on strong US data

 23 Dec 2015 - 8:47

Asian markets up after Wall St rallies on strong US data

Hong Kong: Asian stock markets extended their gains Wednesday, with buying supported by another Wall Street rally as a positive reading on US growth and consumer spending renewed confidence in the world's top economy.

Oil prices also enjoyed fresh buying -- with the US benchmark holding above its European counterpart after overtaking it Tuesday for the first time in nearly a year -- while regional energy firms ticked higher.

US stocks climbed for a second day on data showing steady economic growth in line with expectations during July-September, while personal consumption, which drives about two-thirds of the economy, was also solid.

The figures settled some nerves on global markets after traders had grown concerned about the outlook owing to the plunge in oil prices and weakness outside the United States, particularly China.

Last week's euphoria over the Federal Reserve's interest rate hike, which had boosted confidence, had also started to give way to caution about the bank's plans for its next rise.

"Consumer spending looks like it's helping the US economy," James Lindsay, an Auckland-based fund manager at Nikko Asset Management, told Bloomberg News.

"Volumes tend to get pretty light at this time of year. Markets have had a reasonable run and value is a lot harder to come by.

"The key things are still what happens with China, the flow-on effects into commodities and what the Fed does and how that affects sentiment and currencies."

Crude prices saw a rare second-straight gain after climbing Tuesday, when WTI topped Brent for the first time since January.

Energy firms gain

WTI was up 0.6 percent at $36.37 and Brent added 0.6 percent to $36.30. The gap between the two contracts has narrowed since Washington last week passed a bill lifting a 40-year ban on US oil exports that analysts said could ease a glut in the country.

However, Bernard Aw, market strategist at IG in Singapore, said the outlook for the commodity, which is around 60 percent off its high of above $100 in summer 2014, was still "bearish" due to a global oversupply.

Attention is now on a weekly stockpiles report later in the day from the US Department of Energy.

Energy firms were buoyant, having suffered a painful year. Sydney-listed Rio Tinto surged 4.9 percent and BHP Billiton was up 3.5 percent, with a rise in iron ore prices also providing support.

CNOOC in Hong Kong was 2.3 percent higher and Woodside gained 1.2 percent in Sydney.

On stock markets, Hong Kong surged one percent, Shanghai was up 0.1 percent, Sydney added 0.9 percent and Seoul was 0.6 percent higher.

The dollar remains subdued against its main rivals. It bought 121 yen, well off last week's highs above 123 yen, while the euro edged back towards $1.10 from just above $1.08 last week following the Fed rate hike, with speculation the next rise could be as late as April.