Asia stocks tick higher as oil rebounds
Saudi Arabia has insisted that it will not cut production to tackle a global glut
HONG KONG (AFP) - Asian markets ticked higher Tuesday, as oil also rose on reports of an expected meeting between two of the world s biggest oil exporters, raising hopes for a possible output cut to prevent prices diving further.
A rally on European markets also gave investors confidence to buy again, with Shanghai surging more than two percent as speculation swirls that China is preparing stimulus measures to boost the world s number two economy.
Energy firms were among the big winners, tracking a second successive rally in oil prices, which came after Bloomberg News said Saudi Arabia s oil minister plans to hold talks with his Russian counterpart in Doha on Tuesday.
The news is a much-needed positive for the crude market, which has been buffeted by a global supply glut, overproduction, weak demand, a slowdown in the world economy and a strong dollar.
Saudi Arabia has insisted that it will not cut production to tackle a global glut unless major producers outside the 13-nation Organization of Petroleum Exporting Countries -- including Russia -- co-operate.
But Ric Spooner, chief markets analyst at CMC Markets in Sydney, said: "The fact that there is going to be a meeting is an advance.
"There s obviously a long was to go. The difficulties of getting an agreement are legendary, particularly with as many players as there are in OPEC."
Prices last week touched a near 13-year low but sprang back more than 10 percent Friday as rumours of the talks emerged. They extended those gains Monday and on Tuesday US benchmark West Texas Intermediate rose more than four percent back above $30 a barrel, while Brent added more than three percent above $34.
The advance helped inject some life into regional stock markets after a booming day in Europe, where London jumped two percent, and Paris and Frankfurt soared around three percent. Wall Street was closed for a public holiday.
- Volatility very high -
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Shanghai led the way, rallying 2.6 percent, while Hong Kong put on 1.7 percent. The gains in China come as speculation is intensifying that Beijing is preparing further monetary and policy stimulus after data on Monday showed a slide in exports.
Hopes for more support provided support to Shanghai Monday as it returned from a week-long break to ease just 0.6 percent. That surprise many market-watchers who had expected the beleaguered index to collapse after the ructions across world bourses last week.
Adding to the buying sentiment was data showing new credit surged to a record thanks to huge lending before the Lunar New Year as well as a pick-up in property prices.
Currency traders are also pulling back from bets on a devaluation of the yuan as China strengthens support for its currency and prospects for a US interest-rate increase dim.
The easing of bets against the yuan will provide some relief for China, which has burned through almost $300 billion of its foreign-exchange reserves in the last three months propping up the exchange rate.
In Tokyo, the Nikkei continued to impress, piling on almost one percent by the break after soaring more than seven percent Monday on talk of fresh stimulus by the Bank of Japan.
The broad confidence spreading across trading floors saw dealers leave safe investments such as the yen, boosting exporters, while a near 16 percent surge in mobile giant SoftBank also helped as it kicked off a multi-billion-dollar share buyback.
"Japanese markets have been swung around by outside factors, but those factors are becoming more positive," Toshihiko Matsuno, chief strategist at SMBC Friend Securities, told Bloomberg News.
"But still, volatility is very high and market sentiment is fluctuating. It is too early to say we have seen the bottom."
On currency markets the dollar rose to 114.63 yen from 114.60 yen on Monday in Tokyo, having slumped last week to as low as 111 yen.
