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Asia Pacific Market: Stock gain after OPEC cuts output

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Pacific share market inclined on Thursday, 01 December 2016, on upbeat sentiment after producer club Opec and struck a deal to slash output, easing worries about a global supply glut.

The Organization of the Petroleum Exporting Countries (OPEC) agreed to its first output limiting deal in eight years after Saudi Arabia dropped a demand that arch-rival Iran also slash output. Non- OPEC member also gave consent, making the deal its first coordinated action with Opec in 15 years.

After the OPEC announced the cut of 1.2 million barrels per day to its output, Brent crude futures shot up as much as 13%. The OPEC cut represents about 1% of global production, which will help reduce an glut that has depressed prices for more than two years.

Among Asian bourses

Australia Market ends stronger as energy rally

Australian share market ended sharp higher, with energy shares leading rally after news that OPEC had reached a deal to reduce production, sending crude prices soaring on Wednesday night. At the closing bell, the benchmark S&P/ASX 200 index fell 17 points, or 0.31%, to 5440.50, while the broader All Ordinaries index declined 18.10 points, or 0.33%, to close at 5502.40.

Energy stocks were biggest gainer today on tracking spike in prices. registered its biggest gain in nine months overnight after OPEC approved the first supply cuts in eight years, with focus now shifting to how strictly it will implement its bid to ease a record glut. Brent was up 0.1 per cent at $US51.89, after soaring nearly 9 per cent overnight amid record volumes. OPEC agreed to reduce collective production to 32.5 million barrels a day, Iranian Oil Minister Bijan Namdar Zanganeh said in Vienna. Goldman Sachs said the pact means oil could rise to $US55 a barrel in the first half of next year. Among energy players, Woodside Petroleum surged 6.5% to A$31.54, Origin Energy 8.8% to A$6.46, and Santos 11.7% to A$4.39.

Mining stocks also closed stronger after iron ore futures in China rebounded from a couple of days of heavy losses. Among mining shares, BHP Billiton climbed up 4.9% to A$25.61 and Rio Tinto added 1.7% to A$58.70. Iron ore miner Fortescue Metals Group, which is particularly sensitive to the iron ore price, surged 8.2% to A$6.35.

Nikkei surges to fresh high for 2016 on OPEC deal

The Japan share market advanced to fresh closing high for 2016, driven by a flurry of buying after an oil production cut deal by the Organization of the Petroleum Exporting Countries and yen depreciated to 114-yen level against greenback. The 225-issue Nikkei average climbed 204.64 points, or 1.12 percent, to finish at 18,513.12, its highest closing level since Dec. 30 last year. The Topix index of all first-section issues ended up 13.84 points, or 0.94 percent, at 1,483.27 after rising 0.86 point the previous day.

Buying took the upper hand from the outset of Thursday's trading as the dollar rose above 114 in Tokyo trading for the first time since March 15. Investor appetite for risk assets increased after the OPEC at its meeting in Vienna on Wednesday agreed to cut output. Stocks cut gains in the afternoon in line with the dollar's weakening versus the yen but maintained their firmness for the rest of the session.

Oil companies rose sharply, helped by a surge in crude oil futures in New York trading on Wednesday following the OPEC deal, with JX Holdings advancing 7.45 percent and Inpex jumping 9.95 percent. Thanks to higher U.S. long-term interest rates, mega-banks Mitsubishi UFJ and Sumitomo Mitsui attracted buying, along with insurers Dai-ichi Life and Tokio Marine. The weaker yen pushed up exporters, such as automakers Toyota, Fuji Heavy and Mazda, technology firm Hitachi, electronics maker Panasonic and electronic parts producer Murata Manufacturing.

By contrast, electronics giant Sony, mobile phone carrier KDDI and drug maker Takeda were downbeat. Higher crude oil prices battered airlines JAL and ANA Holdings.

China Stocks bounce on solid PMI

Mainland China closed stronger, amid optimism the mainland economy is stabilizing and after an official survey showed manufacturing activity expanded at its strongest pace in more than two years. Most sectors gained ground, led by energy and materials, while healthcare lagged. The Shanghai Composite Index climbed 0.72%, to 3,273.31, while the Shenzhen Composite Index, which tracks stocks on China's second exchange, rose 0.61% to 2,119.69.

China's manufacturing purchasing managers index rose to 51.7 in November, the National Bureau of Statistics said, as a credit-fueled recovery of smokestack industries helped steady the economy. The non-manufacturing PMI was at 54.7 compared with 54 in October. Numbers higher than 50 indicate improving conditions.

Resource shares rose after oil soared more than 10% on Wednesday to over $50 a barrel as some of the world's largest producers agreed to curb production for the first time since 2008 in a bid to support prices.

Hong Kong Stocks end firmer

The Hong Kong finished session higher, as oil companies rallied after OPEC reached a deal and amid optimism the mainland economy is stabilizing. The Hang Seng Index ended up 0.39%, or 88.46 points, to 22,878.23 while the Hang Seng China Enterprises index added 0.55%, or 54.25 points, to 9,892.31. Turnover decreased to HK$74.8 billion from HK$88.9 billion on Wednesday.

Shares of energy companies rallied after oil surged 10% in New York. The Organization of Petroleum Exporting Countries agreed to reduce collective production to 32.5 million barrels a day, Iranian Oil Minister Bijan Namdar Zanganeh said in Vienna Wednesday. CNOOC (00883) shot up 6% to HK$10.38. PetroChina (00857) surged 4.7% to HK$5.52. Sinopec (00386) put on 2.4% to HK$5.55. Kunlun Energy (00135) added 1.2% to HK$5.74.

Macau gaming authorities announced that November gross gaming revenues jumped 14.4% to MOP18.8 billion, the fourth straight month of growth. But gaming counters retreated after days of rally. Galaxy Entertainment (00027) slipped 2.6% to HK$37.5. Sands China (01928) edged down 0.5% to HK$38. Wynn Macau (01128) slid 4.2% to HK$13.78.

Indian Market settles with modest losses

Indian enchmark indices registered modest losses in volatile session of trade on the first trading day of December led by losses in metal, banking and realty stocks. The barometer index, the S&P BSE Sensex, shed 92.89 points or 0.35% to settle at 26,559.92. The Nifty 50 index dropped 31.60 points or 0.38% to settle at 8,192.90.

Mahindra & Mahindra (M&M) lost 2.02% after the company reported weak tractor and auto sales in November 2016 during market hours today, 1 December 2016. M&M's total auto sales declined 22% to 32,499 units in November 2016 over November 2015. Total domestic sales fell 24% to 29,814 units in November 2016 over November 2015. Total exports rose 22% to 2,685 units in November 2016 over November 2015. The company's total tractor sales fell 21% to 17,262 units in November 2016 over November 2015. Domestic sales declined 24% to 15,918 units in November 2016 over November 2015. Exports surged 50% to 1,344 units in November 2016 over November 2015.

Reliance Industries (RIL) rose 0.45% after Reliance Jio Infocomm (Jio) announced that it has crossed 5 crore subscribers in just 83 days from commencement of services on 5 September 2016. The average rate of addition of 6 lakh subscribers per day is the fastest achieved by any technology company in the world including the likes of Facebook, WhatsApp and Skype.

Wipro gained 0.55% after the company announced that it has signed an agreement for divestment of its EcoEnergy division viz. Wipro EcoEnergy on slump sale basis, for a consideration of $70 million. The buyer is Chubb Alba Control Systems (Chubb Alba), an indirect subsidiary of United Technologies Corporation (UTC). The sale is expected to be closed in early 2017, subject to requisite approvals.

Elsewhere in the Pacific region: New Zealand's NZX50 was up 0.5% to 6932.74. Indonesia's Jakarta Composite index added 1% to 5198.75. Taiwan's Taiex rose 0.3% to 9263.53. South Korea's KOSPI index was up 0.01% to 1983.75. Malaysia's KLCI grew 0.5% to 1626.44. Singapore's Straits Times index rose 0.8% to 2928.58.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, December 01 2016. 17:43 IST