Asian markets mostly up as energy, pharma firms rally
Our Correspondent
AFP,HONG KONG: Most Asian stock markets rose yesterday, with energy firms building on the previous days gains thanks to another surge in oil prices while pharmaceuticals were helped by the collapse of a huge US drugs tie-up. The gains followed positive leads from New York where dealers were cheered by minutes from the Federal Reserves latest policy meeting showing board members broadly agree US interest rates should remain low.
The prospect of borrowing costs staying unchanged until at least June put further pressure on the dollar, which was sitting at 17-month lows against the yen and also struggling against emerging market currencies. The Brent crude contract broke back above $40 following data showing a sharp drop in US inventories in the week to April 1, suggesting a pick-up in demand. The news also comes just weeks ahead of the crucial US driving season. Brent was up 0.3 per cent at $40.01 in Asia, while West Texas Intermediate added 0.2 per cent to $37.83. The two contracts have stormed along since Kuwait said Tuesday that a meeting of producers on April 17 could still reach an agreement on freezing output, even without Iran.
That brought much relief to markets days after OPEC kingpin Saudi Arabia said it would only sign up if other major suppliers followed suit. Sydney-listed energy giant Rio Tinto rose 1.6 per cent while Woodside Petroleum gained 1.8 per cent . In Tokyo, Inpex soared 2.8 per cent and CNOOC was up 2.2 per cent in Hong Kong during late trade. Tokyos Nikkei ended 0.2 per cent higher, snapping a seven-session losing streak that saw it fall more than eight per cent .
Hong Kong gained 0.3 per cent , while Sydney closed 0.4 per cent higher. Seoul added 0.1 per cent even as market heavyweight Samsung slipped despite reporting a better-than-forecast jump in first quarter operating profit. Shanghai ended 1.4 per cent lower. Dovish Fed hits dollar Pharmaceutical companies followed their US and European counterparts higher after US giant Pfizer and Ireland-based Allergan withdrew their proposed $160 billion merger. Pfizer blamed the collapse of the deal on new US rules cracking down on tie-ups aimed at saving on taxes. In Tokyo, Eisai jumped 6.8 per cent and Takeda Pharmaceutical gained 1.7 per cent , while Mumbai-listed Dr Reddy gained 1.3 per cent. The dollar continued to struggle after the Fed minutes highlighted unease about lifting interest rates too soon owing to weakness in the global economy. The minutes from the meeting echoed the recent dovish comments by (Fed chief) Janet Yellen, James Woods, a global investment analyst at Rivkin Securities in Sydney said in an email to clients, according to Bloomberg News. This is an important moment for the Federal Reserve as it highlights a change in weight given to global growth. He added that while prices were rising, it seemed policymakers would rather exceed their two per cent inflation target than risk pushing the US economy back into recession. The dollar slipped to 108.65 yen, its lowest since late 2014, while it also retreated against higher-yielding units. The Australian dollar added 0.8 per cent and the oil-linked Malaysian ringgit gained 0.6 per cent , while the Indonesian rupiah was up 0.6 per cent . The New Zealand and Singapore dollars also climbed. In Europe, London climbed 0.4 per cent , Frankfurt advanced 0.3 per cent and Paris edged up 0.1 per cent .
