Asian shares at two-and-a-half-week high, crude oil rebounds

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By Lisa Twaronite

Asian shares climbed to 2-1/2-week highs on Thursday, heartened by gains on Wall Street and a recovery in crude oil prices in thin trading ahead of the Christmas holiday.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.7 percent after U.S. stocks posted their third straight session of gains.

Now that this month’s U.S. Federal Reserve interest rate hike is out of the way, investors were left to ponder how much tightening the Fed has in store for 2016, as well as the impact of the hike on the rest of the world.

Australian shares jumped 1.3 percent in a shortened Christmas Eve session, while Korea’s KOSPI .KS11 was up 0.3 percent.

“The mood is dependent on moving oil and commodity prices following the Fed meeting,” said Bae Sung-young, a stock analyst at Hyundai Securities.

U.S. crude futures CLc1 added 0.6 percent at $37.71 a barrel while Brent crude futures LCOc1 rose 0.6 percent to $37.58. Both had added more than a dollar a barrel on Wednesday in thin trading, a day after Brent had touched its lowest level since July 2004.

Japan’s Nikkei .N225 rose 0.3 percent, after Japanese markets were closed on Wednesday for the Emperor’s birthday.

Japanese Prime Minister Shinzo Abe’s cabinet approved on Thursday a record fiscal 2016 budget that counts on higher growth and tax revenue to achieve Abe’s aim of reviving the economy and reining in public debt.

Minutes of the Bank of Japan’s November rate review released earlier in the session showed that many policymakers complained of slow wage and capital expenditure growth, but were optimistic that companies will start to boost spending once emerging economies improve.

“Even though the BOJ keeps the door open to further embark on the easing cycle, the recent comments from Governor Haruhiko Kuroda suggest the bar remains high for the committee to further expand its asset-purchase program as the central bank head remains confident in achieving the 2 percent inflation goal over the policy horizon,” David Song, currency analyst at DailyFX, wrote in a note.

U.S. data released overnight provided no real directional clues, as new orders for U.S. manufactured capital goods fell last month while personal income rose, and consumer sentiment hit a five-month high in December.

The dollar index .DXY, which tracks the greenback against a basket of six rival currencies, edged down 0.2 percent to 98.134, below its two-week high of 99.294 set on Thursday last week after the U.S. Federal Reserve raised interest rates for the first time in nearly a decade.

The dollar slipped about 0.3 percent against the yen to 120.62 yen JPY=, down from its Friday high of 123.49.

The euro added about 0.2 percent to $1.0937 EUR=.

Spot gold XAU= rose 0.4 percent to $1,074.45 an ounce after languishing for two straight sessions of losses. Gold prices are still down more than 9 percent for the year, weighed by positioning that took place ahead of the Fed’s widely-anticipated rate hike.

(Additional reporting by Reporting by Yeonsoo Kwak in Seoul; Editing by Sam Holmes & Shri Navaratnam)

 

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