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11:09 pm - Sunday November 19, 2017

Asia shares firm as oil, commodities regain momentum

Agencies, Tokyo

Asian shares inched higher on Tuesday after global oil prices soared to three-month highs on growing hopes of more coordinated measures from oil-producing countries to stem tumbling prices. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.1 percent in early trade while Japan’s Nikkei bucked the trend and dipped 0.3 percent.

Global oil markets jumped more than 5 percent on Monday, with Brent hitting a 2016 peak above $40 a barrel, after Ecuador said it was holding a meeting of Latin American crude producers as OPEC sought a higher anchor price for oil. Ecuador’s Foreign Minister Guillaume Long said his government will host a meeting in Quito on Friday with Venezuela, Colombia, Ecuador and Mexico “to reach consensus over oil, especially prices.” “At least oil producing countries no longer appear to be competing for market shares.

There may not be an output cut but there will likely be an output freeze at least. Because bets against oil were so large early this year now we are seeing a bit of unwinding in that position,” said Koichi Yoshikawa, executive director of financial markets at Standard Chartered Bank in Tokyo. Brent crude futures jumped to as high as $41.04 per barrel on Monday, extending their recovery from a 12-year trough of $27.10 hit in January.

U.S. crude futures also rose to $38.11 per barrel, its highest since early January. Further improving the mood in the battered commodity sector, spot iron ore price surged almost 20 percent , hitting a nine-month high.

The big jump in energy and commodity prices have boosted various assets that have taken a hit in recent months, especially as concerns about weak energy and commodity markets played into broader fears of slowing global economic growth. On Wall Street, the S&P 500 energy sector rose 2.4 percent while weakness in the tech sector offset gains in the overall market.

The S&P 500 Index was only 0.1 percent higher at 2,001.76 while the Nasdaq composite index edged down 0.2 percent. In the currency market, investors rushed back to commodity-linked currencies, sending the Australian dollar to as high as $0.7486 on Monday, its highest in almost eight months. The Aussie last stood at $0.7456.

Posted in: Business

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