Asia report: Oil leads region-wide equities rally

The global rally in equities seen on Monday continued its pace in Asia on Tuesday, with oil prices picking up and concerns about China seemingly easing back for the moment.

The Shanghai Composite Index closed up 3.29% at 2,836.57, leading the region. It came after a jump in the price of oil, fueled by speculation of a production cut or freeze as Saudi Arabian and Russian energy leaders met in Qatar.

It emerged after Asian markets closed that the two production giants had agreed to a freeze.

Oil continued its recovery after Asian trading, with Brent crude last up 2.17% at $34.13 a barrel and West Texas Intermediate up 0.6% to $29.90.

The equities rally also followed the stock gains seen in Europe and Asia on Monday, when US markets were closed for the President's Day holiday. Markets globally had sold off last week, with worries about growth and the financial sector concerning traders around the world.

On the currency front, the yuan - which hit its strongest level against the USD so far this year on Monday, eased back by 0.2% to CNY 6.51 per dollar.

Recent strength in the renminbi had come off the back of last week's sell-off, when markets on the mainland were closed for the week-long Lunar New Year.

Financial stocks were also seen to be recovering in the region, with the sector up 2.7% on the CSI 300 benchmark. That came after Beijing released data showing new loans hit a monthly record in January - financial institutions in the country issued CNY 2.5trn (£265.5bn) in new debt last month.

That was more than four times the CNY 597.8bn issued in December, and well-above the Wall Street Journal's consensus forecast of CNY 1.9trn.

Elsewhere in the region, the Hang Seng Index followed its mainland leaders and rose 1.08%, the Nikkei Stock Average closed the day 0.2% higher, and the South Korean Kospi ended the day up 1.4%.

Sydney roared higher for a second day, with the S&P/ASX 200 gaining 1.4% to close at the day's high of 4,910. Australia's energy stocks were buoyed by the lift in oil prices, with Origin Energy adding 7% and Woodside Petroleum increasing 5.7%.

The antipodean banking sector was also on a high after National Australia Bank - which also operates Bank of New Zealand - reported an 8% rise in quarterly earnings, gaining 0.9%.

Across the Tasman Sea the S&P/NZX 50 rose 0.7%, led by the China-sensitive infant formula exporter The A2 Milk Company, which gained 10%.

The down under dollars were mixed against their American cousin on Tuesday, with the Aussie gaining 0.26% on the greenback to AUS 1.3973 and the Kiwi slipping back 0.76% to NZD 1.5155.

New Zealand's dollar slid after the Reserve Bank of that country released its quarterly inflation expectations survey, showing the lowest level of inflationary expectations since 1994.

That built on speculation for a further interest rate cut in the country with a small agrarian economy, but an aggressively traded currency.