Asia: Markets track Wall St records as energy firms rally

[HONG KONG] Asian markets mostly rose on Wednesday, led by energy giants on the back of rising commodity prices, while traders were also buoyed by strong earnings and positive economic data that saw Wall Street rack up fresh records.

Improving demand and the weakening dollar helped fuel a jump in copper prices to five-month peaks, while oil has also been boosted by a report pointing to lower US stockpiles.

Both crude contracts jumped three per cent on Tuesday with traders also cheered by news that global crude producers, meeting in Russia on Monday, called for stricter adherence to an agreement to cut output.

Big-name energy firms flew on Wednesday, with BHP and Rio Tinto each up more than three percent in Sydney, while Hong Kong-listed CNOOC and PetroChina were up by a similar amount. Tokyo's Inpex piled on around two percent.

"Things are looking a little bit better," Michael Loewen, a strategist at Scotiabank in Toronto, told Bloomberg News. "If we continue to see demand do well and some refined products draws in petrol and distillates, the market should perform pretty well."

On broader markets Tokyo ended the morning session 0.5 per cent higher, while Hong Kong added 0.1 per cent and Shanghai put on 0.3 per cent. Sydney added 0.9 per cent and Singapore was 0.3 per cent higher.

Manila was up 0.8 per cent but there were losses in Seoul and Taipei.

EYES ON FED

The gains followed a record for the S&P 500 and Nasdaq in New York and another strong day of corporate results, including from McDonald's and construction giant Caterpillar.

Support also came from a slew of positive readings from Europe and the US.

Greece enjoyed a successful return to the debt markets after a three-year absence, while a closely watched index of German business confidence hit an all-time high for July.

That was followed by a reading of US consumer sentiment also moving towards record levels after falling two months in a row.

Republicans' success in pushing through a vote to discuss repealing Obamacare also gave traders hope that Donald Trump will soon be able to concentrate on his economy-boosting agenda.

On currency markets the dollar enjoyed something of a bounce against the yen Tuesday, pushing back towards 112 yen ahead of the conclusion of the Federal Reserve's latest policy meeting.

Dealers will be hoping for some guidance from Fed boss Janet Yellen on its plans for interest rates and when it will start winding in its bond holdings balance sheet, effectively sucking cash out of the market.

While there is really no way of knowing what they will do, the "latest chatter suggests the (Fed policymakers) may tip their hat to September the starting date for reducing the balance sheet", Stephen Innes, head of Asia-Pacific trading at forex firm OANDA, said in a commentary.

AFP