Asian stocks climb as oil rally spur gains in oil companies

HONG KONG (BLOOMBERG) - Asian stocks advanced for a second day as a rally in oil prices drove energy companies higher and Japanese equities gained for a ninth day.

The MSCI Asia Pacific Index added 0.8 per cent to 135.49 as of 4:16 p.m. in Hong Kong. A gauge of Asian energy shares surged the most in seven weeks as oil climbed after Iran and Iraq signaled that a group of oil producing countries would reach a supply-cut deal.

Japan's Topix index extended its longest run of gains since August 2015, overshadowing concerns over a magnitude 7.4 earthquake off the coast of Fukushima. Hong Kong's Hang Seng China Enterprises Index rose the most since May to lead the region higher. Singapore's Straits Times Index was 5.5 points or 0.2 per cent higher at 2,822.20.

Asian stocks are down this month as Donald Trump's Nov. 8 election victory deepened an outflow of funds from emerging markets on expectations for a US interest-rate increase in December. All four major US equity indexes rose to fresh records for the first time since 1999, fueled by optimism that the new administration's policies will spur economic growth.

Federal Reserve Chair Janet Yellen said last week that the central bank is close to lifting borrowing costs. Fed funds futures are showing a 100 percent chance of a US rate hike next month, compared with a 68 per cent probability in early November.

"There's so many things that are contributing at the moment, the optimism around Trumponomics, and the fiscal stimulus that we have been asking for for years now," said James Woods, a Sydney-based investment analyst at Rivkin Securities. "That is absolutely helping and also the US earnings growth for the third quarter that beat the earnings recession. The US economy is doing well and it's a good sign for everyone else."

The Topix climbed 0.3 per cent, erasing earlier losses of as much as 0.2 per cent. Japan issued its biggest tsunami warnings in five years after the earthquake struck at 5:59 a.m. local time Tuesday. The market will be shut on Wednesday for a holiday.

The Hang Seng China Enterprises Index advanced 2.2 per cent as China Oilfield Services and PetroChina surged at least 3.9 per cent. The Hang Seng Index rose for a third day and the Shanghai Composite Index gained 0.9 per cent to the highest close since Jan. 6.

Equity gauges in Taiwan, South Korea and Australia increased at least 0.9 per cent. The Philippine Composite Index sank 2.5 per cent to an eight-month low, as property shares tumbled. The nation's gauge formed a death cross after its 50-day moving average fell below its 200-day mean.