Nikkei leads gains across the board in Asia

Nikkei leads gains across the board in Asia

Asian markets tacked on gains on Thursday morning, following a higher finish on Wall Street overnight.

Japanese benchmark index, the Nikkei 225, was up 2.61 per cent as of 9.20 a.m. HK/SIN while across the Korean Strait, the Kospi gained 1.3 per cent.

Down Under, S&P/ASX 200 traded up 1.65 per cent, with all sectors but gold trading in the green. The energy sector led the gains, up 3.28 per cent, while financials were up 1.58 per cent.

IG's chief market strategist Chris Weston said in a morning note, "In terms of price action, the last few days has seen the ASX 200 roll over after the first half hour, so given the strong moves in US and European trade perhaps we will see stocks supported from the outset."

Banks and resources producers saw support with most major stocks trading up. Australia's so-called Big Four banks - ANZ, Commonwealth Bank of Australia, NAB, and Westpac - were up between 0.95 and 1.83 per cent.

Miners such as Rio Tinto gained 2.64 per cent, BHP Billiton up by 5.38 per cent, and Fortescue tacking on 7.20 per cent. Japan's January exports slumped 12.9 per cent

Earlier, Japan's Ministry of Finance released data that showed the country's January exports fell 12.9 per cent at an annual rate on-year, worse than the market expectation of a 11.3 per cent drop. Imports were down 18 per cent on-year, with trade balance falling to a deficit.. Exports to China, one of Japan's biggest trading partners, slipped 17.5 per cent in January.

Despite the disappointing trade numbers, most Japanese stocks, including the trading houses,that supply everything from energy to metals to grains and textiles in resource-scarce Japan, traded up. The big five trading houses, Mitsubishi, Mitsui, Sumitomo, Itochu, and Marubeni traded between 2.20 and 5.30 per cent higher.

The yen strengthened against the dollar, with the dollar-yen pair trading down 0.19 per cent at 113.88, compared to yesterday's close of 114.08. While a stronger yen is usually a negative for exporters as it reduces their overseas profits when converted into local currency, major exporters such as Toyota, Honda, and Sony traded up between 1.20 and 3.79 per cent.

Japanese banks were up between 0.45 and 1.30 per cent; Mitsubishi UFJ gained 1.25 per cent.

The Japanese overnight call rate, which is the benchmark lending rate between banks, fell to negative levels on Wednesday. Earlier this week, Japan's negative interest rate policy kicked in as concerns over the long-term profitability of the banks lingered.

US crude gains 2 per cent in Asian hours

The March contract for US crude was up 2.02 per cent at $31.28 a barrel at 9.15 a.m. HK/SIN, while global benchmark Brent rose 1.13 per cent at $34.89.

Energy plays across the region were mostly up; Santos gained 5.78 per cent, Inpex added 5.29 per cent, and Woodside Petroleum was up 3.35 per cent.

Oil prices rose sharply overnight after an unexpected drop in crude inventories, which fell by 3.3 million barrels in the week to Feb. 12 to 499.1 million, compared with analysts' expectations for an increase of 3.9 million barrels.

The rise came after Iran's oil minister Bijan Zanganeh said that while he supported a production ceiling to stabilize oil prices - as mooted by big producers Saudi Arabia and Russia - it was the first of several steps that should be taken, according to Reuters reports that quoted the ministry's official Shana news agency.

OPEC ministers had travelled to the Persian state to talk about a possible production freeze deal between global oil producers.

Juan Prada from Barclays said in a note that though Iran did not commit to freezing its own output, "the market looked through Iran's apparent lack of commitment." Overnight in the US

Stateside, the US Federal Reserve's January meeting minutes were released, in which policymakers worried that tighter global financial conditions could hit the US economy and considered changing their planned path for rate hikes in 2016.

Major indexes on Wall Street closed up; the Dow Jones industrial average gained 257.42 points, or 1.59 per cent, at 16,453.83. The S&P 500 was up 31.24 points, or 1.65 per cent, at 1,926.82 and the Nasdaq composite closed up 98.11 points, or 2.21 per cent, at 4,534.06.

On the data front, a number of key economic numbers are due including January CPI and PPI numbers from the Chinese mainland.

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