Asian stock markets, led by Australia, mostly gain as oil prices rebound

Stock markets in Asia went up Wednesday as a recovery in oil prices lifted energy shares.

Australia’s S&P/ASX 200 XJO, +1.00% was up 0.6%, while Hong Kong’s Hang Seng Index HSI, -0.53% and the Shanghai Composite Index SHCOMP, +0.26% were flat.

Japan’s Nikkei Stock Average NIK, +0.27% gained 0.5%. South Korea’s Kospi SEU, -0.25% was down 0.2%.

Shares in Australia were up for the ninth straight session, with the energy sector up 1%.

In Singapore, Noble Group Ltd.’s N21, -7.95% stock fell 4.6% after Moody’s Investors Service slashed the commodities firm’s credit rating to junk status. It was another blow for the firm, which has struggled this year amid allegations of accounting irregularities and a slump in commodities prices. Shares have plunged 64% this year.

U.S. stocks rose Tuesday, as investors bought shares of some of the year’s biggest decliners, including energy stocks. Brent crude oil prices are down more than 30% for the year, but gained 2.4% on Monday in the U.S.

The region has been volatile in recent weeks, amid a broad slide in commodity prices, trouble in the high-yield debt market, lackluster global economic growth and the U.S. Federal Reserve’s first interest rate rise in nearly a decade. A recovery in oil and natural gas prices in recent days has added momentum to recent sessions.

“The psyche of the market is still very negative on everything,” said Andrew Sullivan, managing director at Haitong International Securities, adding that any further declines in oil could weigh on stocks in the near-term.

Trading volumes are also thinning as the year draws to a close. Financial markets in Asia, the U.S., and Europe will be closed Friday for New Year’s Day.

The MSCI Asia Pacific is on track to lose 4.4% this year. Asia had a volatile summer, with a stock crash in China and the surprise devaluation of the yuan.

Markets in Southeast Asia, Hong Kong and India are down the most in the region this year. Thailand’s SET has lost 14%, the Hang Seng Index is down 6.8% and India’s Sensex is down 5%.

By comparison, the S&P 500 is up 1% year-to-date while the Dow Jones Industrial Average is down 0.6%.

Still, further easing in China, corporate growth in Japan and a recovery in the U.S. are some things investors can look forward to in the coming year, Sullivan said.

“The news is getting better” for the Asia region, he said.

Brent crude oil was last down 1.1% at $37.39 a barrel in Asian trading Wednesday.

Gold prices were flat at $1,068.20 a troy ounce.

Source: MarketWatch