Asian markets higher, oil rally goes on

10 May, 2018

Equity markets in Asia traded slightly higher on Thursday, as oil prices reached fresh multi-year highs on the back of President Donald Trump’s decision to impose sanctions against Iran.

Japan’s Nikkei 225 advanced 0.40 percent to close at 22,498.00 points, boosted by its mining and oil subindexes. In South Korea, the Kospi benchmark added 0.83 percent to 2,464.16 points.

China’s mainland indexes Shanghai composite and Shenzhen were 0.51 and 0.38 percent higher respectively. Hong Kong's Hang Seng index was up 0.89 percent by the time of this writing, with energy-related stocks showing significant gains.

China’s consumer price index came in at 1.8 percent year over year in April, below a 1.9 percent estimation. The producer price index came in line with an expectation of 3.4 percent.

In Australia, the S&P/ASX 200 advanced 0.18 percent, also supported by the ongoing oil rally. Stocks of Woodside Petroleum - Australia’s largest oil and gas operator - gained 4.85 percent.

Oil prices extended gains in early trading hours as expectations for further reductions in global supply levels continued to build following President Donald Trump’s decision on Iran.

As it was widely expected, Trump said Tuesday the US is pulling out from the international nuclear deal with Iran signed in 2015. Unless some other deal is worked out, Washington could impose fresh sanctions against Tehran within the next six months.

“This was a horrible one-sided deal that should have never, ever been made,” Trump said in a national address from the Diplomatic Reception Room of the White House.

“It didn’t bring calm, it didn’t bring peace, and it never will.”

In Malaysia, financial markets will remain closed Thursday and Friday after the country celebrated general elections. Former president Mahathir Mohamad won the elections.

Meanwhile, Malaysia's regulator is set to announce its interest rate decision later today, with analysts pointing at no major changes in the country’s monetary policy.

On Wednesday, the S&P 500 ended 0.9 percent higher at 2,697.79, with Occidental Petroleum among best performers with a 5.4 percent gain. In the Dow Jones industrial average, which added 182.33 points to 24,542.54, Chevron and Exxon Mobil led advancers.

Europe: the ECB’s economic bulletin is up at 08:00 GMT, followed by UK’s industrial and manufacturing production at 08:30 GMT, as well as trade balance figures for March. Also, the Bank of England is holding a new monetary policy meeting, but no changes are seen. The interest rate decision is due at 11:00 GMT.

United States: the consumer price index for April will be out at 12:30 GMT, along with initial jobless claims. The Federal Budget Balance is next at 18:00 GMT.

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