Asian stocks climb as oil crawls up from ten-month low | Reuters

By Nichola Saminather

SINGAPORE Asian stocks advanced on Thursday as oil prices inched up after hitting a 10-month low overnight on concerns over a supply glut and falling demand, dragging U.S. and European shares lower. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS edged up 0.2 percent. Japan's Nikkei .N225 and South Korea's KOSPI .KS11 were flat, while Australian shares rose0.4 percent.Crude oil crept up from multi-month lows hit on Wednesday on concerns over growing U.S. production and reduced Chinese refinery activity. "The time for contrarian trades in oil is fast approaching, but I would want to see some stability in price and the technicals start to become more convincing," said Chris Weston, chief market strategist at IG in Melbourne. U.S. crude futures CLc1 rose 0.3 percent or 13 cents to $42.66 a barrel. They closed down 1.6 percent on Wednesday after touching their lowest level since August. Global benchmark Brent LCOc1 climbed 0.2 percent or one cent to $44.92. It closed down 2.6 percent on Wednesday after touching a seven-month low.

The resulting decline in oil stocks hit stocks in Europe and on Wall Street overnight. Britain's FTSE .FTSE, Germany's DAX .GDAXI and France's CAC 40 .FCHI closed between 0.3 percent and 0.4 percent lower. The Dow Jones Industrial Average .DJI closed down 0.3 percent, while the S&P 500 .SPX was slightly lower. Nasdaq .IXIC closed up 0.7 percent, lifted by biotech stocks.[.N]

Financial stocks also contributed to losses on Wall Street, driven lower by a drop in the Treasury yield curve to its flattest in almost a decade, as investors tried to reconcile a hawkish Federal Reserve with deteriorating inflation measures. Boston Fed President Eric Rosengren and Fed Vice Chair Stanley Fischer suggested they are concerned less about raising rates too fast or too high than about keeping them too low for too long.“I think the market may be pricing in a little higher odds of another rate hike before the end of the year, and that is helping drive some of the flattening,” said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York.The yield curve between five-year notes and 30-year bonds US5US30=TWEB flattened to as low as 95.20 basis points, the narrowest since December 2007, on Wednesday and again early on Thursday.

The dollar was marginally lower on Thursday. The dollar index .DXY was at 97.523, following Wednesday's 0.2 percent loss. The greenback bought 111.41 yen JPY=D4.Sterling GBP=D3 retained Wednesday's 0.3 percent gain to trade at $1.268 early on Thursday after the Bank of England's chief economist said he was likely to vote for an interest rate hike this year. Until now, he has been seen as largely supportive of keeping rates low.The euro EUR=EBS was flat at $1.117, holding on to Wednesday's 0.3 percent gain. Spot gold XAU= rose 0.3 percent to $1,250.06 an ounce. (Reporting by Nichola Saminather; additional reporting by Karen Brettell; Editing by Kim Coghill)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date: Jun 22, 2017 07:00 AM

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