Oil price assists Asian market recovery

  • 17/05/2016
Oil price assists Asian market recovery

Asian shares have recovered from two-month lows after a rebound in technology giant Apple Corp and oil price gains boosted Wall Street.

MSCI's broadest index of Asia-Pacific shares outside Japan ticked up 0.1 percent on Tuesday, extending the recovery from its two month low set on Friday. Japan's Nikkei gained about 1.0 percent.

"The market's risk appetite seems to be coming back, or rather, its excessive pessimism is easing," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

Wall Street rallied sharply on Monday, juiced by a jump in Apple shares and gains from energy stocks that were backed by stronger oil prices.

Shares in Apple, which had lost about one-fifth of their value in the past month on worries about the company's slowing sales growth, finished 3.7 percent higher after Warren Buffett's Berkshire Hathaway reported taking a stake of about US$1 billion in the iPhone maker.

Oil prices hit six-month highs on Monday on global supply outages and Goldman Sachs taking a more positive view on the market, although a stockpile build at the US storage hub for crude futures limited gains.

Brent crude futures traded flat at US$48.96 per barrel in early trading in Asia, after having risen 2.4 percent on Monday, when it rallied to US$49.47 earlier, its highest since early November, in a test towards US$50.

US crude's West Texas Intermediate (WTI) futures changed hands at $US47.77, maintaining their 3.3 percent gains on Monday.

Yet concerns about a slowdown in the Chinese economy could weigh on Asian shares after investment, factory output and retail sales all grew more slowly than expected in April, in data published on Saturday.

In the past month, shares in Greater China are among the worst performers globally, with Hong Kong, Taiwan and Shanghai shares all registering falls of around 7 percent.

In the currency market, the British pound rose 0.3 percent in early Asian trade to US$1.4445 helped in part by the report that the "remain" camp held a 15-point lead over its "leave" rivals in Britain's EU referendum campaign.

The US dollar was little changed against other currencies.

Against the yen, the US currency stood at 109.09 yen, stuck in its well-worn range in the past week.

The euro traded at US$1.1315, off its two-week low of US$1.1283 touched on Friday.

Reuters

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