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ASIA MARKETS: Surging Oil Prices Boost Asian Stock Markets

by October 11, 2016 General

By Kenan MachadoNikkei jumps as yen weakens; Samsung drags on Korea’s KospiRising crude oil prices and weaker local currencies helped boost Asian stock markets on Tuesday, with Japan’s Nikkei standing out as the region’s best performer.The Nikkei Stock Average was up 1.2%, led by exporters amid a weaker yen, with Australia’s S&P/ASX 200 rising 0.2%, and Hong Kong’s Hang Seng Index reversed early gains to fall 0.3%. Both the Japanese and Hong Kong markets were closed Monday.Meanwhile, the Shanghai Composite Index gained 0.3%, building on Monday’s 1.5% rise, as Chinese investors returned from a week-long national holiday.Risk-on sentiment is returning to Asia, thanks to higher oil prices due to production cuts, as well as recent gains in U.S. market, said Alex Furber, a senior client services executive at CMC Markets.“There is going to be general relief as well at the prospect of a (Donald) Trump win receding,” Furber added, following the second televised U.S. presidential debate. Markets are less favorable to Trump as they dislike the uncertainty of his economic policies, say analysts.“A fair bit of U.S. trading partners are in Asia” and may feel relieved for now, said Furber.On Monday, crude oil prices hit a one-year high in the U.S., after Russian President Vladimir Putin said the country would support the Organization of the Petroleum Exporting Countries’ attempt to cut its collective output.Though crude prices were slightly weaker in Asian trade Tuesday on profit taking by oil traders, they hovered at levels higher than on Monday.China’s biggest oil companies listed in Hong Kong got a lift from the oil price gains, with offshore oil producer Cnooc (>> CNOOC Ltd) gaining 1.4%, and PetroChina (>> PetroChina Company Limited) adding 1.6%.