Asian stocks near six-week high as oil holds above US$50, STI up 0.2%

A man looking at an electronic stock board at the window of a securities company in Tokyo on June 3.
A man looking at an electronic stock board at the window of a securities company in Tokyo on June 3.PHOTO: AFP

SYDNEY (BLOOMBERG) - Asian stocks held near a six-week high on Wednesday (June 8) before Chinese trade data as crude oil traded above US$50 a barrel and South Korea's won strengthened.

The MSCI Asia Pacific Index was up 0.2 per cent as of 9:54 am in Tokyo, after recording its highest close since April 26 on Tuesday. Japan's Topix gained 0.2 per cent, South Korea's Kospi held near its highest level in more than a month and Australia's S&P/ASX 200 retreated from a one-week high.

Singapore's Straits Times Index was up 0.18 per cent at 2,853.17 as of 9:45 am.

Stock-index futures for China and Hong Kong advanced after the S&P 500 closed within 1 per cent of its all-time high. The Bloomberg Dollar Spot Index was near a one-month low and oil maintained gains from the last session, when it closed at highest since July 2015 in New York.

With global stocks trading near the highest levels of 2016 and the Federal Reserve grappling with mixed economic reports as it prepares to increase interest rates, China's trade figures are forecast to show tepid global demand. The World Bank cut its 2016 global growth forecast to 2.4 per cent from 2.9 per cent, citing sagging corporate investment in advanced economies and the impact of falling commodity prices on emerging-market exporters. Raw-materials prices sank in January to the lowest in a quarter century before entering a bull market this week.

"China trade data is going to be the big one today," said Chris Weston, Melbourne-based chief market strategist at IG Ltd. "We're in this situation where central banks are engineering continued lower yields and tighter credit spreads, and equities still look compelling on a relative basis."

The won gained 0.4 per cent versus the greenback, making it the best performer among 31 major currencies, and the Japanese yen rose 0.3 per cent. The Australian and New Zealand dollars fell 0.1 per cent.

The British pound was little changed, after strengthening 0.7 per cent on Tuesday. One-month implied volatility in the currency - a gauge of projected swings in the exchange rate - doubled in the past two weeks to a seven-year high. Danske Bank is telling clients to hedge against currency losses that will affect more markets than just the pound as Britain's June 23 referendum on its European Union membership draws closer.

Commodities West Texas Intermediate crude oil was little changed at US$50.41 per barrel. US crude stockpiles are estimated to have fallen for a third week, trimming a glut. Crude has surged about 90 per cent from a 12-year low in February amid unexpected disruptions and a continuous slide in US output, which is under pressure from the Organization of Petroleum Exporting Countries' policy of pumping without limits.