Asian stocks climb as metals bounce after China producer prices soar

Pedestrians stand in front of a stock markets indicator board in Tokyo, Japan on Jan 4, 2017.
Pedestrians stand in front of a stock markets indicator board in Tokyo, Japan on Jan 4, 2017. PHOTO: EPA

WELLINGTON (BLOOMBERG) - Asian stocks rallied on Wednesday (Jan 11), led by a surge in mining stocks, after evidence of quickening price growth in China boosted metals and other commodities.

Raw materials shares in the region rose toward their highest level in almost a month after a jump in copper to iron ore on Chinese producer-prices data on Tuesday.

While oil edged higher, it remained near a one-month low amid concern the US is raising its output forecast just as Opec members start to cut production.

The yen held on to a two-day climb versus the greenback amid anxiety ahead of Donald Trump's first press conference as president-elect, an event that could provide detail on his policy outlook.

The fastest pace of growth for Chinese producer prices in five years propelled gains in industrial metals and other raw materials amid prospects the world's second-largest economy will export inflation around the world via its supply chains. The data came amid a sense of caution in US markets as the euphoria over Trump's perceived pro-growth policies faded with Congress holding confirmation hearings for his proposed cabinet members. The S&P 500 Index closed little changed after rallying as much as 0.5 per cent on Tuesday.

"Given China is the world's exporter, changes in their prices are important," said James Woods, global investment analyst in Sydney at Rivkin Securities. "This will add to the shift we are seeing in global equity markets away from defensive sectors such as utilities, telecommunications and health care into more cyclical sectors."

The MSCI Asia Pacific Index climbed 0.1 per cent as of 9:27am Tokyo time, with mining stocks up 1.3 per cent and Japan's Topix index rallying 0.5 per cent.

Miners and technology shares led Australia's S&P/ASX 200 Index up 0.4 per cent, as the Kospi index gained 0.5 per cent in Seoul.

Futures on Hong Kong's Hang Seng and Hang Seng China Enterprises gauges climbed at least 0.3 per cent in most recent trading.

The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, was little changed early on Wednesday.

The yen was little changed at 115.78 per dollar following a two-day advance of more than 1 per cent. The euro was steady at US$1.0556.

West Texas Intermediate crude gained 0.4 per cent to US$50.97 a barrel after sliding almost 6 per cent over the past two days. Analysts project US crude stockpiles rose by 1.5 million barrels last week, muting optimism fueled by Russia, Iraq, Kuwait, Kazakhstan and Azerbaijan saying they're implementing last year's accord to cut production.  Copper futures gained 0.1 per cent following last session's 2.9 per cent surge.