HONG KONG (China): Asian markets rose Wednesday with commodities-linked firms boosted by China’s strong inflation reading, but oil prices struggled after a couple of days of sharp losses fuelled by worries over Opec’s offers to cut output.
Despite gains round the region, investors are on edge as they simply await Donald Trump’s first press conference since his US election win, with initial excitement about his plans now embracing scepticism about whether he can deliver.
China on Tuesday said factory-gate prices surged last month at their fastest pace in many more than several years, ultimately causing hopes the region could export much-needed inflation world wide and help kickstart global growth.
The news helped increase prices in key commodities which include iron ore, copper and aluminium, which will provided support to producers.
Sydney-listed BHP Billiton was up in excess of 2% and rival Rio Tinto gained almost 4%, when participating in Tokyo Sumitomo Metal Mining wear 3.7%.
In China there initially were gains of up to 9% in some commodity firms, although late selling saw many pare early advances.
“Given China is a world\’s exporter, alterations in their prices are very important,” James Woods, global investment analyst in Sydney at Rivkin Securities, told Bloomberg News.
Hong Kong stocks climbed 0.7% and Sydney don 0.2%, while Tokyo ended 0.3% higher.
Seoul rallied 1.5% and Singapore 0.2%, while there was clearly also healthy rises from Wellington to Kuala Lumpur.
However Shanghai ended down 0.8%.
Trump to talk
However, on oil markets both main contracts were only marginally higher, having tanked almost 6% during the past two sessions as dealers fret over Opec’s production deal.
News that more and more US rigs had come online was with news Iraq had pumped record amounts in December and that it planned to generate more in February. Which has raised questions regarding the prospect of success for November’s Opec output cut agreement.
Eyes now consider Trump’s news conference, which is scrutinised to your outlook for his presidency, with little over the week until they\’re sworn into office.
Markets as well as dollar surged after his election as traders bet his plans for prime infrastructure spending, low taxes and deregulation will fan growth and bring on higher inflation, forcing the Federal Reserve to hike borrowing costs.
Yunosuke Ikeda, head of currency strategy for Japan at Nomura Securities in Tokyo, said: “Not one person knows what Trump will say, however if the view gains ground that he or she won’t aim to talk along the dollar, that would support further strength.”
But Stephen Innes, senior trader at OANDA, said in a very note: “Traders will probably be viewing it with a dangerous of scrutiny (after) the market\’s exhilaration over ‘Trumpenomics’.
“Initially, euphoria gave way to an increasingly calculated solution to the (dollar) even as entered year end, and therefore has morphed towards a a higher level scepticism in the proposed US infrastructure spend.”