Crude oil led rebound in US stocks overnight. The Dow Jones Industrial Average rose 282.01 points (1.78%) to 16,167.23. The broad-based S&P 500 gained 26.55 points (1.41%) at 1,903.63, while the tech-rich Nasdaq Composite Index advanced 49.18 points (1.09%) to 4,567.67.
Crude oil futures finished higher on Tuesday on hopes that members of the Organization of the Petroleum Exporting Countries and producers outside the cartel may reach an agreement to cut output to stem the persistent slump in oil prices. March West Texas Intermediate crude rose $1.11, or 3.7%, to settle at $31.45 a barrel on the New York Mercantile Exchange. March Brent crude, the global oil benchmark, ended at $31.80 a barrel, up $1.30, or 4.2%.
Attention now turns to central banks, with both the Federal Reserve and the Bank of Japan reviewing policy this week. The US Federal Reserve's policy decision is schedule later in the global day. The U.S. central bank is widely expected to leave the target for the federal funds rate unchanged at 0.50% at the end of its two-day meeting on Wednesday.
Market watchers expect the Fed to signal on Wednesday, after a two-day meeting, a go-slow approach to future rate hikes after lifting benchmark interest rates in December for the first time in more than nine years. The turmoil in oil and stocks drastically lowered the chance of a March hike and this is well priced in. Fed fund futures are indicating only around 30% chance of a March hike and around 50% of a June hike.
The Bank of Japan will hold a policy meeting on Thursday and Friday. Given sluggish household spending and slower consumer price rises, the central bank is expected to ease its policy further to achieve its 2% inflation goal.
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Among Asian bourses
Nikkei gains on easing hopes
Japan share market advanced on following Wall Street gains overnight and persistent speculation central banks will step in to help bolster growth and fight deflation. All of the 33 Topix industry groups rose, with Financial Business, Pulp & Paper, Banks, Information & Communication, Mining, and Electric Power & Gas shares comprising notable advancers. The benchmark Nikkei 225 index advanced 2.72%, or 455.02 points, to 17163.92. The Topix index of all Tokyo Stock Exchange First Section issues grew 40.47 points, or 2.98%, to 1400.70.
Energy-related stocks gained the most amongst the 33 Topix industry groups after crude oil in New York added 3.7% on Tuesday before dipping 0.9% on Wednesday. Oil explorer Inpex Corp. jumped 4% and K&O Energy Group Inc. surged 4.6%.
Shares of carmakers advanced on reports of alliances in the industry. Suzuki Motor Corp. jumped 11% and Toyota Motor Corp rose 3.8%. Daihatsu Motor Co. soared 16%, after Toyota said it's considering a buyout offer to take full control of the minivan manufacturer.
Apple suppliers were in focus after Apple reported fiscal first quarter earnings that beat market estimates, but came in below expectations on revenue and iPhone sales. Among Tokyo-listed Apple suppliers, Japan Display was up 2.92% and Asahi Glass added 2.30%.
SoftBank Group Corp. jumped 7% after its U.S. subsidiary Sprint Corp. posted a smaller-than-expected quarterly loss and grew its cash reserves, providing relief to investors
Sumitomo Mitsui Financial Group Inc. rose 5.1% after quarterly profit unexpectedly rose as gains from sales of its shareholdings and lower bad-debt costs cushioned it from declining loan and bond-trading income.
Australia Stocks down on profit booking
Australian share market ended lower, snapping three day winning streak, amid profit booking on renewed weakness in crude oil prices and sharp falls on the Chinese equity market yesterday. Barring realty and bullion, All ASX sectors declined, with energy, materials, and financial issues being major losers. At the close, the benchmark S&P/ASX 200 index declined 60.20 points, or 1.2%, to 4946.40 points, while the broader All Ordinaries index dropped 56.30 points, or 1.11%, to 5000.80 points.
Shares of materials and resources were down after iron ore prices slipped 0.7% to $US40.80 a tonne. BHP Billiton slipped 1.8% to A$15.01, while Fortescue fell 4% to A$1.46. Mining giant Rio Tinto lost 2.7% to A$38.11 following the sale of its Mount Pleasant thermal coal mine site in NSW's Hunter Valley for $US224 million (A$319 million) plus royalties. The divestment follows another A$865 million deal struck in September when Rio offloaded its stake in the neighbouring Bengalla open cut coal mine.
Shares of energy players tumbled on tracking drop in crude oil prices. Among oil explorer and refiners, Woodside Petroleum declined 1.6% to A$25.99, Santos 2.7% to A$2.88, and Origin Energy 4.2% to A$3.88. Oil Search declined 4.6% to A$5.99 after it reported a 10% decline in quarterly revenue on the back of a sharp fall in oil and gas prices, despite an increase in total production.
Shares of banks and financials saw losses after better than expected inflation data leaving the Reserve Bank of Australia little space to cut rates at its next meeting, with Westpac Banking Corp down 1.9% to A$30.33, ANZ Banking Group down 2% to A$23.68, National Australia Bank down 3.1% to A$26.90, and Commonwealth Bank down 1.8% to A$77.60.
New Zealand shares flat
Equities on the New Zealand share market were almost unchanged after a sell-off in Chinese equities unwound some of the positive sentiment leftover from Wall Street. Vector, Warehouse Group rose while Air New Zealand fell. By the provisional closing, the S&P/NZX 50 Index decreased 0.2 points and was almost unchanged at 6148.43. Within the index, 25 stocks rose, 15 fell and 10 were unchanged. Turnover was $94 million.
Vector showed the biggest gain, up 2.2%. Air New Zealand posted the biggest fall today, down 4.8%.
Veritas Investments plunged 42% to 29 cents after the food and beverage investor downgraded its outlook for earnings to $3 million-$3.5 million from $5.3 million-$5.5 million previously flagged, and nixed a first-half dividend. Veritas had affirmed its profit guidance in November, saying first-quarter trading was in line with expectations and the second quarter was expected to be more profitable.
China Market falls 0.5%
Mainland China stock market ended down in volatile trade, extending selling streak, amid lingering concern about capital outflows and bearish equity prediction from market experts. Risk sentiments dented further on deepening economic growth woes after declines in industrial profits for December 2015. The Shanghai Composite Index ended down 0.5%, or 13.65 points, at 2736.13, after tumbling as much as 4.1% earlier in the session. That followed the index's worst day on Tuesday since the suspension of the circuit breaker rule in early January, closing down 6.4%, hitting its lowest level since December 2014. The Shenzhen Composite dropped 0.83%, or 14.27 points, to 1,700.153 after trading down as much as 5.62% earlier in the session. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, shed 10.16 points, or 0.35%, to 2839.29.
The National Bureau of Statistics said on Wednesday that profits at industrial companies dropped 2.3% in 2015, extending the previous month's 1.4% slide.
Shares of Airlines and power producers tumbled after weaker than expected industrial profits data for December 2015 and concerns a weaker yuan could further hurt earnings of companies with dollar debt. China Eastern Airlines Corp. slid 5.4%. China Southern Airlines Co. tumbled 4.4% after Daiwa Capital Markets Hong Kong estimated a fourth-quarter loss, citing faster yuan devaluation and its higher exposure to U.S. dollar-denominated debt.
Energy related stocks jumped, with PetroChina paced gains, rising 2.8%. Shanxi Lu'an Environmental Energy Development Co. jumped 9.2%, while Yanzhou Coal Mining Co. gained 7%.
Hong Kong stocks up 1%
The Hong Kong stock market lifted up, as investors' spirits lifted up on following positive leads from overseas markets overnight after rebound in oil prices. The benchmark Hang Seng Index has gained 191.65 points, or 1.02%, to 19052.45 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, added 64.35 points, or 0.82%, to 7959.51 points. Turnover reduced slightly to HK$76.2 billion from HK$77.2 billion on Tuesday.
Brilliance China (01114) dipped 2% to HK$7.55 after Credit Suisse downgraded its rating and lowered its target price. Dongfeng (00489) put on 2% to HK$9.65.
Henderson Land (00012) soared 6% to HK$40.05. Its chairman Lee Shau-kee added 6.86 million shares in the company last week. Citi Research said in a research report that the developer may plan a restructuring. CK Property (01113) and New World (00017) gained less than 1% to HK$39.15 and HK$6.26.
Sensex, Nifty end flat
Indian stock market closed the volatile day on a flat note as investors opted to remain on sidelines ahead of January F&O expiry session and US Federal Reserve policy outcome due later in the day. Sensex closed 6.44 points up at 24,492, while Nifty settled 1.60 points up at 7,437.75.
Havells India fell after the company failed to meet market expectations. The company reported a profit after tax (PAT) of Rs 121 crore in the December-15 quarter against market expectations of Rs 130 crore.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index added 0.27% to 7849.83. South Korea's KOPSI rose 1.4% to 1897.87. Malaysia's KLCI rose 0.3% to 1631.54. Singapore's Straits Times index added 0.02% at 2546.18. Indonesia's Jakarta Composite index climbed up 1.6% to 4583.63.
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