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Asia: Markets rally on China data, US and Europe gains


[HONG KONG] Shares and emerging currencies rallied, while oil bounced from 12-year lows in early Asian trade on Wednesday following upbeat Chinese trade data that provided some much-needed respite from a volatile start to 2016.

After more than a week of sharp losses fuelled by worries over China's economy, news that the country's exports had picked up in December provided some added incentive to buy after a strong lead from Europe and New York.

The rise in overseas shipments, from a fall in November, indicated authorities' weakening of the yuan currency against the dollar was beginning to filter through.

A spokesman for China's Customs said in a statement that "foreign trade of private enterprises shows vitality".

Shanghai stocks - which have already slumped almost 15 per cent this year - climbed 0.7 per cent and Hong Kong was up 2.3 per cent.

Sydney, where several firms with strong trade links with China are listed, jumped 1.2 per cent having ended in the red every session so far this year.

And Tokyo, which has also fallen for six straight days, surged 2.7 per cent by the break.

Dealers were also buoyed by the central People's Bank of China's decision not to lower its yuan fixing against the dollar. Its weakening of the rate was one of the catalysts for last week's global rout.

The rare upbeat mood followed healthy gains in Europe and the US, where a positive start to the corporate earnings season provided some support.

The Nasdaq rose 1.0 per cent, the S&P 500 was up 0.8 per cent and the Dow put on 0.7 per cent, while London, Paris and Frankfurt all climbed one percent or more.

Global markets have been in free fall since the beginning of the year, owing to continuous worries about the impact of a growth slowdown in China - a key driver of world growth - on other economies.

But Evan Lucas, a markets strategist in Melbourne with IG Ltd, said: "A small floor is emerging in indices.

"Oil remains the biggest story in the current market. The supply issues are well documented, however, the part that is leading this second leg lower is Chinese demand, or lack of it."

Crude prices on Tuesday fell briefly below the US$30 per barrel line in New York for the first time since December 2003 but they have since picked up after a private report showed US supplies fell last week.

However, the commodity remains under pressure from a supply glut, weak demand and a global slowdown - especially in China - while key producers in the Opec cartel continue to pump at near record levels.

In morning trade Wednesday, US benchmark West Texas Intermediate was up 1.4 per cent and Brent gained 1.1 per cent.

On currency markets the confident mood saw investors seek out higher-risk investments.

The crude-reliant Malaysian ringgit rose 0.5 per cent against the dollar, while Australia's dollar was up 0.7 per cent and the Indonesian rupiah gained 0.4 per cent. South Korea's won gained 0.4 per cent.

The greenback also rallied against the yen, having fallen more than two percent since the start of the year.