Asia: Shares climb amid metals bounce as yen slips

[WELLINGTON] Asian stocks rallied, led by a surge in mining companies, after evidence of quickening price growth in China boosted metals and other commodities. Oil was below US$51 a barrel.

Raw materials shares in the region rose toward their highest level in almost a month amid gains in copper to iron ore on Chinese producer-prices data out Tuesday. While oil edged higher, it remained near a one-month low amid concern the US is raising its output forecast just as Opec members start to cut production.

The yen snapped a two-day climb versus the greenback ahead of Donald Trump's first press conference as president-elect, which could provide detail on his policy outlook. The Korean won fell with Turkey's lira.

The fastest pace of growth for Chinese producer prices in five years propelled gains in industrial metals and other raw materials amid prospects the world's second-largest economy will export inflation around the world via its supply chains.

The data came amid a sense of caution in US markets as the euphoria over Mr Trump's perceived pro-growth policies faded with Congress holding confirmation hearings for his proposed cabinet members. The S&P 500 Index closed little changed after rallying as much as 0.5 per cent on Tuesday.

"Given China is the world's exporter, changes in their prices are important," said James Woods, global investment analyst in Sydney at Rivkin Securities Ltd.

"This will add to the shift we are seeing in global equity markets away from defensive sectors such as utilities, telecommunications and health care into more cyclical sectors."

Stocks

The US dollar-denominated MSCI Asia Pacific Index climbed 0.1 per cent as of 10:06am Tokyo time, with mining stocks up 1.2 per cent and Japan's Topix index rallying 0.5 per cent.

Miners and technology shares led Australia's S&P/ASX 200 Index up 0.5 per cent, as the Kospi index gained 0.8 per cent in Seoul. Equities in New Zealand climbed for a third day.

Futures on Hong Kong's Hang Seng and Hang Seng China Enterprises gauges climbed at least 0.3 per cent in most recent trading.

The S&P 500 closed unchanged at 2,268.90 Tuesday as health-care and financial shares rose, while real-estate and energy shares slumped. The Dow Jones Industrial Average fell 0.2 per cent to 19,855.53.

E-mini futures on the S&P 500 were little changed at 2,263.

Currencies

The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, added 0.1 per cent early Wednesday.

The yen weakened 0.3 per cent to 116.07 per US dollar following a two-day advance of more than one per cent. The euro was little changed at US$1.0552.

The won lost 0.4 per cent to 1,199.40 per US dollar, while the lira sank 0.5 per cent. The Australian and New Zealand dollars were down at least 0.2 per cent.

Bonds

Yields on Australian government bonds due in a decade rose by two basis points, or 0.02 percentage point, to 2.73 per cent after shedding five basis points last session.

Similar maturity Treasuries yielded 2.39 per cent, up another basis point Wednesday.

Commodities

West Texas Intermediate crude gained 0.3 per cent to US$50.97 a barrel after sliding almost 6 per cent over the past two days. Analysts project US crude stockpiles rose by 1.5 million barrels last week, muting optimism fuelled by Russia, Iraq, Kuwait, Kazakhstan and Azerbaijan saying they're implementing last year's accord to cut production. The supplies data is due late Wednesday Copper edged down by 0.5 per cent in London following a 3 per cent surge on Tuesday.

Gold for immediate delivery slipped 0.2 per cent to US$1,186.02 an ounce, declining for the first time this week.

BLOOMBERG