China gains drive emerging stock rally; oil set for weekly surge

[WELLINGTON] Chinese shares drove an advance in emerging- market equities, with indexes in Hong Kong and Shanghai extending gains at seven-year highs. The dollar held losses, while oil headed for its best week since at least 2011.

The MSCI Emerging Markets Index climbed 0.3 per cent by 10.41am in Tokyo, rising for the 14th time in 15 days as the Hang Seng China Enterprises Index jumped more than 0.8 per cent with the Shanghai Composite gauge.

US index futures lost 0.1 per cent. The euro and yen headed for their best weeks versus the greenback in almost a month. Wheat resumed declines and tin sank to its lowest price since 2009 in London. US oil and Brent crude have rallied more than 8 per cent this week.

Demand from mainland Chinese investors has made Hong Kong- traded shares the best performers globally after Russia the past month.

The US reports on consumer prices on Friday, after a run of lackluster economic data that has dethroned the dollar. Oil has been rallying amid speculation American production, which has helped fuel the global crude glut, may be starting to ease.

"US data is coming in a little bit below expectations, so the general sense of data disappointment is still very much there," weighing on the dollar, Kymberly Martin, a markets strategist in Wellington at Bank of New Zealand Ltd, said by phone.

"The way the market is currently sitting, it's more inclined to react to those data disappointments rather than any positive data."

BLOOMBERG