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Asian stocks resume rally after crude oil, US shares rebound

[SYDNEY] Asian stocks rose, resuming this week's rally after oil rebounded and US equities extended gains to a third day.

The MSCI Asia Pacific Index jumped 1.6 per cent to 119.56 as of 9:10 am in Tokyo, with material companies leading gains. The Standard & Poor's 500 Index rose as the Federal Reserve hinted it may be expecting a slower pace of interest-rate increases this year.

Oil climbed above US$31 a barrel after Iran supported a proposal by Saudi Arabia and Russia to freeze production at near-record levels, without saying whether it would curb its own output.

"The Fed minutes show that it does look like they're gearing up for a slower rate hike path, which is good" for risk assets, said Nader Naeimi, Sydney-based head of dynamic markets at AMP Capital Investors Ltd, which oversees about US$115 billion.

"I think this rally has further to go, with the conditions set for the rebound to continue for a little while. Pessimism had got to extreme levels."

The regional benchmark gauge is up 5.8 per cent over four days, heading for its best week since 2011 after sinking to a 3 1/2-year low on Friday amid concern about the growth outlook for the world's largest economies and the rout in oil.

The Topix index gained 2.7 per cent, wiping out Wednesday's losses. Japanese stocks are up 10 per cent this week, including an 8 per cent surge on Monday, as investors speculate losses that sent global equities into a bear market last week were overdone and amid optimism central banks will support financial markets.

The yen traded at 114.26 per US dollar.

Japan Stimulus Japan's Prime Minister Shinzo Abe plans to keep stimulus measures off the table for now, the Nikkei newspaper reported. This comes as the Bank of Japan starts to charge some lenders' deposits at the central bank, part of its unprecedented monetary easing program that's run since Mr Abe came to power in 2012.

Australia's S&P/ASX 200 Index climbed 1.8 per cent and New Zealand's S&P/NZX 50 Index rose 0.6 per cent.

South Korea's Kospi index advanced 1.2 percent.

Futures on the Hang Seng Index climbed 1.7 per cent and contracts on the Hang Seng China Enterprises Index gained 2.5 per cent.

Futures on the FTSE China A50 Index added 1.9 per cent. Chinese stocks rose Wednesday, sending the benchmark index to the highest level in three weeks, after the government accelerated measures to prevent a deeper slowdown in the world's second-biggest economy.

US Futures

Futures on the S&P 500 gained 0.2 per cent. The underlying measure jumped 1.7 per cent Wednesday as the year's most-battered shares continued to recover and energy shares climbed.

Minutes from the January Federal Open Market Committee meeting showed that officials were worried about a series of drags and disruptions, signaling they may step back from a December projection of four rate increases this year.

Crude oil jumped for a second day, with West Texas Intermediate advancing 2 per cent after a 5.6 per cent surge on Wednesday.

"The storm is blowing over and markets are stabilizing," said Mitsushige Akino, executive officer at Ichiyoshi Asset Management Co in Tokyo.

"Declines in oil had been weighing on risk sentiment, so it's a positive sign that prices are rebounding."


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