Asian stocks set to extend gains as oil hits six-month high, Wall Street rebounds

An electronic stock indicator in Tokyo on May 10.
An electronic stock indicator in Tokyo on May 10.PHOTO: AFP

WELLINGTON (Bloomberg) - Asian stocks were poised to extend gains, with crude oil at a six-month high, after a rally in commodity shares and Apple Inc. drove a rebound in the UnitedStates. The yen held declines.

Futures on equity gauges from Japan to Australia signaled gains, while New Zealand shares snapped a three-day drop as U.S. crude neared US$48 a barrel and New York copper futures rose for a second session. Apple jumped the most since March on Monday after Warren Buffett's Berkshire Hathaway Inc. disclosed a stake in the world's most valuable company. Japan's currency held above 109 per US dollar, while New Zealand government debt tracked a drop in Treasuries amid speculation over the outlook for U.S. monetary policy.

Berkshire Hathaway's disclosure of a US$1.1 billion stake in Apple reinvigorated a stock that has slumped more than 10 per cent this year amid concern about the outlook for the smartphone market. The pickup in commodity prices is also righting global equities after weaker economic data and disappointing company earnings wiped out almost US$2 trillion of value in the first two weeks of May. Data Friday showing a jump in American retail sales continued to resonate for investors, bolstering the case for the Federal Reserveto raise U.S. interest rates as other central banks struggle to fuel inflation via stimulus efforts.

"Recent market behaviour has shown what look to be Jekyll- and-Hyde traits," Mark Smith, a senior economist in Auckland at ANZ Bank New Zealand, said in a client note. "In rates markets, global considerations, including potential 'Brexit' concerns and Chinese growth slowdown fears, look to be dominating local considerations. Some pundits have gone as far as to conclude that the Fed is stuck in an adverse feedback loop, whereby the Fed will not be able to hike for fears of what this will do to financial markets." Stocks New Zealand's S&P/NZX 50 Index, the first major stock gauge to start trading each day, added 0.6 per cent as of 7:54 a.m. Tokyo time as utilities drove gains. Futures on the S&P 500 Index were little changed following a 1 per cent climb in the underlying measure on Monday, as Apple - the biggest stock in the index by market value and weighting - rose 3.7 per cent.

In Japan, futures on the Nikkei 225 Stock Average added 0.6 per cent to 16,620, while yen-denominated contracts in Chicago held last session's gains at 16,615. Futures on Australia's S&P/ASX 200 Index increased 0.9 per cent in most recent trading, as those on Hong Kong's Hang Seng Index advanced 0.4 per cent. Kospi index futures in Seoul climbed 0.2 per cent.

The Reserve Bank of Australia releases minutes of its May meeting on Tuesday, and data on inflation expectations in New Zealand is also due. Japan reports on industrial output and Hong Kong updates its jobless rate.