Battered crude oil prices bounced back from their lows on Thursday (January 21, 2015), propelling solid gains in Asian shares and the dollar.
Thursday’s gains built on Wall Street’s consolidation overnight in which major indexes finished with declines of more than 1 percent, but well off the 3 percent plus they plumbed in the previous session when U.S. crude had dropped to 2003 lows.
Japan’s benchmark Nikkei average added 0.5 percent early after plunging 3.7 percent in the previous session to a 14-1/2 month closing low.
But investors remained cautious as another shakeout on Wall Street and oil prices suggested volatility in financial market will continue to temper appetite risk.
South Korean shares rose after a steep decline in the previous session, as investors bought battered stocks.
The Korea Composite Stock Price Index (KOSPI) was up 0.4 percent at 1,853.50 points as of 0223 GMT.
Hong Kong market bounced off Wednesday’s (January 20) 3-1/2 year low, as the city’s currency strengthened against the dollar on Thursday morning, while the offshore yuan, also known as CNH, also appeared to have stabilized.
The benchmark Hang Seng index rose upon opening, reaching 19048.51 (+162.21, 0.85%) by 0935 local time (0135GMT).
China’s fragile stock markets started weaker after Wall Street struck its lowest levels since 2014, though the main indexes for Shanghai and Shenzhen bourses still clung to gains for the week.
The benchmark Shanghai Composite Index fell 0.6 percent in early trade, with losses led by the utility and industrial sectors. Though the index has slumped nearly 17 percent in 2016, it remains 2.6 percent higher for the week so far and has found support under 2,900, which could suggest a near-term base is forming.
Australian shares bounced as funds bought beaten down stocks of companies that offer a reliable dividend payment including the major banks.
The S&P/ASX 200 index rose 1 percent to 4,893.1 by midday, though that only recovered part of Wednesday’s (January 20) sharp losses.
Technically, dealers said the index was deeply oversold having fallen 7.5 percent in less than three weeks, so a bounce was not unexpected. There was also evidence of solid support under the 4,830 level.
Dividend stocks were all in demand with Commonwealth Bank, Westpac and National Australia Bank major contributors to the rise in the overall index. (Reuters)
