Asian stocks extend holiday rally with oil up for 4th day, STI up 0.6%

An investor looks at an electronic board showing stock information at a brokerage house in Hangzhou, China.
An investor looks at an electronic board showing stock information at a brokerage house in Hangzhou, China.PHOTO: REUTERS

SYDNEY (BLOOMBERG) - Asian stocks advanced and crude oil climbed for a fourth day on Thursday (Dec 24), boosting energy shares, while data showing strength in consumption raised confidence in the US economy.

Equity gauges across the region rose and oil headed for its biggest weekly gain in two months after energy and raw-material stocks lifted the Standard & Poor's 500 Index. While trading has been subdued this week before the year-end holidays, industrial metals and oil are rallying from the worst commodities rout since the financial crisis.

The MSCI Asia Pacific Index gained 0.6 per cent as of 11:03 am in Tokyo. Japan's Topix index and South Korea's Kospi both advanced 0.3 per cent. Hong Kong's Hang Seng Index gained 0.7 per cent, while indexes in Taiwan and Singapore climbed 0.6 per cent.

New Zealand's S&P/NZX 50 Index rose 0.5 per cent, closing at a record high. Australia's S&P/ASX 200 Index rallied 1.3 per cent with volume about half its 30-day average for the time of day. BHP Billiton, the world's biggest miner, surged 5.2 per cent, paring this year's slump to 33 per cent.

Markets in Australia, Hong Kong and Singapore shut early on Thursday, while Malaysia, Indonesia, Philippines and Sri Lanka are closed.

Higher US consumer purchases added to evidence that the biggest part of the world's largest economy will continue to underpin growth as the Federal Reserve raises borrowing costs. That's putting a floor under concern that decelerating Chinese growth and a commodity slump will harm the global economy.

"Equity markets look keen to have a good Christmas break and deal with the hangover of ongoing systemic issues in the new year," said Angus Nicholson, a Melbourne-based market analyst at IG Ltd. US personal income "was yet another data point that further underlines the improving employment situation. The bounce in commodity stocks is only ephemeral; the ongoing issues for these industries are far from solved."

Futures on the S&P 500 were little changed after the underlying gauge advanced 1.2 per cent on Wednesday, erasing its decline for the year. The Stoxx Europe 600 Index jumped 2.7 per cent on Wednesday, as all 19 industry groups rose, with miners and energy shares leading gains.

Oil in New York headed for the largest weekly gain in more than two months as US inventories declined and the number of drilling rigs fell. West Texas Intermediate rose 0.8 per cent to US$37.78 a barrel, gaining for a fourth day, the longest run of advances since April. Futures are up 8.9 per cent this week, the biggest advance since Oct 9.

Stockpiles slid 5.88 million barrels last week, the biggest loss since June, government data showed. A 1.2 million-barrel gain was projected in a Bloomberg survey. Gulf Coast refiners typically curb deliveries at the end of the year to reduce local taxes. The number of active oil rigs in the US fell by 3 to 538 this week, according to Baker Hughes Inc.