Asia markets advance, Singapore shares up 0.38%

Asia markets advance, Singapore shares up 0.38%

Asia markets opened higher on Tuesday, after oil prices pared losses overnight, bolstering gains in US stocks.

Singapore shares opened higher buoyed by Wall Street's recovery on Monday, with The Straits Times Index up 0.38 per cent, or 10.95 points at 2,928.7, reported The Business Times.

Australia's ASX 200 added 1.54 per cent in early trade, with the energy and materials subindexes leading gains. Japan's Nikkei 225 jumped 3.57 per cent, retracing its 3.4 per cent loss in the previous session, boosted by a relatively weaker yen against the dollar and as market players digested the extent of damage from last week's earthquakes.

In South Korea, the Kospi advanced 0.42 per cent.

Oil prices advanced during Asian hours, after paring losses overnight. Global benchmark Brent was up 0.09 per cent at US$42.95 (S$58.02) a barrel, after settling down 0.4 per cent. US crude futures advanced 0.43 per cent to US$39.95 a barrel, after finishing lower by 1.4 per cent overnight.

On Sunday, the world's largest oil exporting countries failed to reach an agreement in Doha, Qatar, to freeze output at January levels in order to tackle the global supply glut.

The deal's failure initially sent oil prices tumbling over 5 per cent. The reversal came after reports said that a workers' strike in Kuwait had hit the gulf country's daily oil output. Reuters reported that the strike cut the OPEC producer's crude output by more than 60 per cent, from about 3 million barrels per day to about 1.1 million.

Analysts said Kuwait's reduction in output remains supportive for crude for the time being.

The reversal in oil prices gave an overnight boost to commodity currencies such as the Australian dollar.

The Aussie traded at US$0.7761 as of 8:36 a.m. HK/SIN time, compared with around US$0.76 during Asian hours in the previous session.

"Investors were relieved that oil did not fall 10 per cent on the back of the Doha meeting and they were quick to reward risk currencies like the Australian and New Zealand dollars with gains," said Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, in a morning note.

Some experts cautioned the Aussie could see increased volatility today, as the Reserve Bank of Australia is set to release its most recent meeting minutes.

Angus Nicholson, a market analyst at IG, said the RBA's minutes "is likely to be quite volatile for the Aussie, as its lofty levels make it very susceptible to any noticeable jawboning."

The Kiwi traded at US$0.6978 in the morning session, compared with its previous close at US$0.6948.

The Japanese yen also pulled back, with the dollar/yen pair trading at 109.10 in the morning after touching levels under 108 in the previous session.

Major US indexes closed up overnight, with the Dow Jones industrial average adding 0.6 per cent, the S&P 500 gaining 0.65 per cent and the Nasdaq composite up by 0.44 per cent.

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