Asia stocks inch higher; Crude prices rise as brimming storage fears lessen
Crude prices rose today, trimming some of this week’s steep losses after US stockpiles climbed less than expected and hopes grew for demand to pick up as some European countries and US cities get closer to reopening their economies.
US West Texas Intermediate (WTI) crude futures surged to a high of $13.85 and were up 8.8 per cent, or $1.09, at $13.43 at 0038 GMT, paring a 27 per cent plunge over the first two days of this week.
Yesterday crude prices ended mixed with Brent up on positive sentiment about the easing of coronavirus lockdowns, while US crude traders remained cautious as storage capacity were filling up fast.
Brent crude futures rose 1.8 per cent, or 36 cents, to $20.82, adding to a 2.3 per cent gain on Tuesday.
Back home, the Indian stock market charted yet another stunning rally yesterday, led by banking and financial stocks, that gave the S&P BSE Sensex a 371-point lift to 32,114 level while the broader NSE Nifty 50 benchmark settled 98 points higher at 9,380.
Expectations of a second round of stimulus from the government to bolster an economy flagging under the impact of the coronavirus pandemic gave investors a glimmer of hope.
But Wisdom Capital analysts warn the sustainability of the stock market relief rally would depend on the easing of lockdown measures and government stimulus to get businesses large and small back on track.
Meanwhile, the Securities and Exchange Board of India (SEBI) in a circular on Tuesday clarified that the grandfathering of the existing unlisted non-convertible debentures (NCDs) is applicable across the mutual fund industry and said the MFs can transact in such NCDs. However, the regulator added that investments in such NCDs will continue to be subject to compliance with investment due diligence and all other applicable investment restrictions.
Asian markets climbed with US equity futures as corporate earnings continued to roll in while the dollar extended this week’s declines.
Stocks in Hong Kong, Shanghai and Sydney rose. Equities gained in Seoul despite a warning from Samsung Electronics Co. that profit may decline in the second quarter as the pandemic hits demand.
Today’s early gains pushed Asia-Pacific stocks up 20 per cent from recent lows, set to join global peers in a bull market.
Nasdaq futures climbed about 1.5 per cent after Alphabet Inc. reported better-than-estimated sales.
Investors are looking for any forward guidance from the US Federal Reserve, which is due to issue a policy statement at the close of its two-day meeting today.
However, analysts said it was unlikely the Fed would make further major policy moves, given the scope and depth of its efforts to counter the economic damage caused by the pandemic.
The Fed had responded to the economic devastation of the pandemic by slashing interest rates, resuming bond-buying and backstopping credit markets.
The European Central Bank meets tomorrow.
On Tuesday, megacap tech stocks drove all three major US stock indexes into the red.
US equities saw a choppy session with technology stocks retreating amid a slide in consumer confidence and as more companies withdrew earnings guidance.
The Dow Jones Industrial Average fell 0.13 per cent, the S&P 500 lost 0.52 per cent and the Nasdaq Composite dropped 1.4 per cent.