Asia: Stocks set for second day of gains after commodities jump

[SYDNEY] Asian equities were poised to climb for a second day after the Standard & Poor's 500 Index rose to a four- month high and commodities from oil to silver advanced on Tuesday.

Futures on equity gauges for Japan to Australia and Hong Kong foreshadowed advances while contracts on the USbenchmark were little changed. The Bloomberg Commodity Index, a measure of returns for 22 components, jumped 2.5 per cent on Tuesday, the biggest gain since Aug 27.

The yen held two days of losses ahead of a report that economists forecast will show Japan's exports slumped for a sixth month in March.

A gauge of Asian equities has risen in all but three sessions this month as data pointed to a stabilization in Chinese growth, US companies reported better-than-expected earnings and the Federal Reserve signaled a slower pace of interest-rate hikes.

The better sentiment has yet to fully reverse yen strength, hurting exporters and leading some analysts to speculate that the Bank of Japan will ease monetary policy further when it meets April 27-28.

"The 'risk on' tone in markets has continued over the past 24 hours," Darren Gibbs, chief New Zealand economist at Deutsche Bank in Auckland, wrote in a report.

"European and US markets have kicked on as commodity prices in general have displayed considerable further strength."

The S&P 500 Index rose 0.3 per cent Tuesday, closing above 2,100 for the first time since since Dec 1, as commodity producers rallied in a seesaw session amid mixed company profit reports.

Stocks

New Zealand's S&P/NZX 50 Index, the first major stock gauge to start trading each day in the Asia-Pacific region, slipped 0.2 per cent as of 7:52 am in Tokyo, following six days of gains.

Futures on Australia's S&P/ASX 200 Index rose 0.6 per cent in most recent trading, while those on Hong Kong's Hang Seng index climbed 0.7 per cent.

In Japan, Nikkei 225 Stock Average futures added 0.9 per cent to 17,030 as of 4 am in Osaka.

Currencies

The yen weakened less than 0.1 per cent to 109.23 per US dollar, extending its retreat from a 17-month high of 107.63 reached last week.

The currencies of commodity-exporting nations New Zealand and Australia are near highest level against the dollar in 10 months. The kiwi traded little changed at 70.44 US cents early Wednesday after breaching the 70-cent mark on Tuesday for the first time since June.

The Aussie fetched 78.07 US cents after climbing as high as 78.26 in the previous session.

Commodities

Crude oil fell 1.5 per cent to US$40.46 a barrel in New York after gaining 3.3 per cent on Tuesday. Over the weekend, the world's biggest producers failed to reach a deal in Doha to limit supplies amid a global glut.

BLOOMBERG