Asia: Equities edge higher as energy stocks lead the way

Most Asian stocks advanced on Tuesday, recovering from the widespread losses they suffered in the previous session.

Asian markets endured a jittery a Monday, with investors opting for safe haven assets in the wake of Friday’s terrorist attacks in Paris.

However, Tuesday saw optimism return to equity markets in the region, with Hong Kong’s Hang Seng gaining 1.15%, while Japan’s Nikkei Stock Average closed up 1.22%.

The former was boosted by a strong performance from energy stocks, with Hong Kong shares of state-owned energy firms like PetroChina and China Shenhua Energy climbing 1.59% and 1.95% respectively.

“It’s a sign of the times how easily markets can digest such geopolitical horrors and demonstrate such resilience in the face of atrocity and stock market gains come in spite of lingering worries about a slowing China,” said Michael Van Dulken, head of research at Accendo Markets.

China’s Shangai Composite Index reversed earlier gains to close down 0.06%, while Australia’s S&P/ASX 200 rallied 2.29%, as higher oil prices helped energy stocks recoup some of the heavy losses they suffered last week.

Oil prices rose overnight on supply concerns, although Brent remained just under $45 a barrel, while West Texas Intermediate was slightly above the $41.5 a barrel mark.

“Crude is a better bid given that French retaliation against Syria could damage the supply side but could hardly reverse the oversupply conditions in the global oil market,” said Ipek Ozkardeskaya, market analyst at London Capital Group.

“The crude inventories in the US are back on their way to all-time-highs.

“The oil market could easily be handed back to the bears and the WTI futures may be susceptible to a move below $40 per barrel.”

On the currencies front, the yen reached its lowest level in a week against the dollar, after touching its highest level against the greenback on Monday. However, with the haven appeal quickly dissipating on Tuesday, the Japanese currency lost 0.08% against the dollar, while investors sold yen amid increasing expectations the US Federal Reserve will hike interest rates next month.

Elsewhere, the Australian dollar gained 0.41% against its US counterpart.