Asia report: Oil, Wall Street lead region higher

Most Asian markets advanced on Tuesday, following Wall Street’s lead overnight and taking cues from rising oil prices.

In Japan, the Nikkei 225 added 1.13% to close at 16,652.80, riding a weaker yen through the close.

The US dollar was trading around the 109 mark for much of the day, and was last worth JPY 109.57 having weakened 0.5%.

After Apple closed 3.7% higher in the US off the back of news Berkshire Hathaway was plunging $1bn into the company, suppliers to the California-based tech giant were mixed in Asia.

One of them, Japan Display, managed to add 2.54% in Tokyo trading.

On the mainland, the Shanghai Composite Index lost 0.25% to close at 2,843.73, while the Shenzhen Composite eked out a 0.02% gain to 1,814.68.

The country’s steel industry was in the spotlight, as it fired up the Haixin plant - a single-mill operation capable of producing half the UK’s entire output in a year - for the first time in four years.

Any fresh optimism in the market came with a caveat, though, with the Financial Times warning that as rebar prices in the country were moderating, the bubble that moved from futures to physical mills will soon be making itself known in export markets.

“That could further inflame trade tensions with the US and Europe just as China is lobbying for recognition as a ‘market economy’, a status that makes it harder for overseas regulators to assess duty on Chinese shipments,” commented FT correspondent. Christian Shepherd.

In Korea, the Kospi was flat, gaining just 0.01% to close at 1,968.06, while Hong Kong’s Hang Seng Index added 1.18% to 20,118.80.

Seoul’s benchmark was dragged by a 2.41% drop in Posco sares after it emerged Nippon Steel will sell 1.5 million shares in the steelmaker.

After the disposal, Nippon Steel will own 3.32% of Posco; its own shares rose 3.3% in Tokyo.

An Apple supplier and competitor, Samsung Electronics, managed a 1.28% gain in Korea, while Taiwan’s Hon Hai Precision Industry and Pegatron were up 3.43% and down 0.64% respectively.

Oil prices advanced during Asian trading, though performance turned mixed as Europe came online.

Brent crude was last down 0.43% at $48.76 per barrel, while West Texas Intermediate gained 0.13% at $47.78.

Australia and New Zealand Banking Group said the rise in crude prices helped to boost commodities and commodity currencies overnight, noting “the increasing intensity in supply-side disruptions in the oil market should see prices well-supported in the short term.”

In Australia, the S&P/ASX 200 was up 0.69% at 5,395.90 points, with the materials and energy subindexes propping the benchmark up with gains of 1.92% and 3.12% respectively, though they were offset by a 0.12% drop in the weighty financials.

In energy, Santos gained 6.3% and Woodside Petroleum added 2.88% during the session.

Miners on the up included BHP Billiton at 3.5% and Rio Tinto, growing 1.46%.

In financials, the National Australia Bank lagged 3.07% as the stock went ex-dividend, for a payout of 99 Aussie cents per share.

The Reserve Bank of Australia also released its latest minutes, which show it mulled leaving rates on hold before decided to make the 25-basis point cut which has left the country’s official cash rate at a record low 1.75%.

The Aussie shifted closer to the greenback on the news, and was last 0.44% stronger at AUD 1.3657.

Across the ditch, New Zealand shares hit a new record high though were still just shy of the 7,000 mark, with the S&P/NZX 50 rising 0.9% to 6,974.80.

Electricity generating company Meridian Energy was one of the big leaders, rising 3.7%. The publicly-traded but majority state-owned company counts Rio Tinto as one of its biggest customers, supplying its Tiwai Point aluminium smelter on the South Island.

The Kiwi also shifted closer to the greenback, and was last 0.18% stronger at NZD 1.47.