A major index of Asian shares rose to five-month highs on Tuesday, taking its cue from gains on Wall Street after a strike in Kuwait helped pull crude oil prices above their overnight lows.
Financial spreadbetters predicted a mixed opening for European markets, with Britain’s FTSE 100 .FTSE seen opening down 0.2 percent, Germany’s DAX .GDAXI seen gaining 0.3 percent, and France’s CAC 40 .FCHI expected to edge 0.1 percent higher.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.8 percent, after touching its highest intraday levels since November. On Monday, the Dow Jones industrial average .DJI climbed to its highest level since July.
Japan’s Nikkei stock index .N225 ended up 3.7 percent, a day after it fell 3.4 percent as investors assessed the impact of earthquakes in southwestern Japan’s Kyushu on manufacturers’ supply chains.
“The effects of the Dow reaching a nine-month high created a buying trend that helped lift the Nikkei today,” said Hiroki Allen, chief representative of Superfund Securities Japan in Tokyo.
The Korea Composite Stock Price Index (KOSPI) .KS11 was up 0.1 percent after the Bank of Korea kept rates unchanged as expected.
Brazil’s Bovespa .BVSP index fell 0.6 percent on Monday as President Dilma Rousseff vowed to fight her impeachment, which could force her from office after 13 years of leftist Workers’ Party rule.
Crude oil futures firmed after a choppy Asian session and remained well off lows plumbed on Monday after weekend talks failed in Doha, where producers had hoped to curb a supply glut. A strike in Kuwait temporarily slashed the country’s oil output by more than half, and helped pull crude prices higher. [O/R]
Brent crude LCOc1 added about 0.8 percent at $43.26 a barrel, while U.S. crude CLc1 rose about 1 percent to $40.18.
Commodity-linked currencies pared their steep losses logged after the Doha deal breakdown.
The Australian dollar AUD=D4 was last up 0.5 percent at $0.7791 after earlier rising as high as $0.7797, its highest since June. On Monday, it had skidded as low as $0.7594.
In minutes of its April 5 policy meeting, Australia’s central bank cautioned that a rising Aussie could tilt the economy off balance.
The perceived safe-haven yen slumped in line with the recovery in risk appetite. The dollar added 0.1 percent to 108.95 yen JPY=, while the euro added 0.3 percent to 123.48 yen EURJPY=R, moving away from the previous session’s three-year low.
Against the dollar, the euro edged up about 0.1 percent to $1.1324 EUR=, as investors looked ahead to the European Central Bank’s policy meeting on Thursday. While no change is expected, investors are awaiting Mario Draghi’s news conference for clues on the central bank’s thinking.
The U.S. Federal Reserve will meet next week, and is also expected to keep its policy unchanged, though any suggestion that more hikes are on the way sooner rather than later would lift the greenback.
New York Fed President William Dudley said in a speech on Monday that economic conditions are “mostly favorable” yet the central bank remains cautious in raising interest rates because threats loom.
For the second time in as many weeks, Boston Fed President Eric Rosengren warned on Monday that futures markets, which see only one modest rate hike in each of the next few years, are off the mark.
Gold posted its best quarterly jump in nearly 30 years in the first quarter on expectations that the Fed will not be able to raise rates this year as many times as some had believed.
Spot gold XAU= was up 0.5 percent at $1,237.06 an ounce on Tuesday, erasing an earlier drop.