Asian markets rose in early Wednesday trading as energy-related shares were complimented by an overnight climb in oil prices. Three separate events lifted oil prices, including a new forecast by the U.S. Energy Information Administration (EIA) that predicted a steep rise in demand next year. At the same time, the number of active oil rigs has been declining recently, creating some concerns that demand would not be met next year. In another move intended to reduce the global supply glut, Russia, one of the world’s largest oil exporters, held talks with Saudi Arabia about cooperating on easing the market’s oversupply.
During the Asian trading session, NYMEX light sweet crude added 2.1% to trade at $49.56 a barrel while Brent rose over 4% in overnight trading. Energy shares across Asia soared, helping benchmarks register marked gains. The Japanese energy index climbed 7.2%, though that still wasn’t enough to offset most of the Nikkei’s volatile afternoon after the Bank of Japan opted to maintain its current interest rate policy. The Nikkei ended 0.8% higher. The South Korean KOSPI rose 0.8%, aided by an 8.7% rally in Samsung (OTC:SSNLF) shares after the tech giant forecasted an 80% increase in operating profit over the previous year. Hong Kong shares were also lifted by strong energy-related gains. CNOOC (NYSE:CEO) and Sinopec (NYSE:SHI) rose 8.1% and 4.7%, respectively, as the Hang Seng registered a 1% climb. Chinese markets are closed until October 8th for the National Day holiday.
U.S. benchmarks ended Tuesday’s trading session on a mixed note after a large selloff in the biotechnology sector stopped the year’s longest rally in the U.S. market. Futures for the S&P 500 signaled that more losses are likely over concerns that pharmaceutical companies’ earnings were plummeting. The biotech rout has resulted in the S&P closing in the red for the first time in the last six days. At the same time, the International Monetary Fund has cut its growth outlook for the world economy, pointing out the slowdown in emerging markets as well as the currently-soft demand for commodities. The Standard and Poor’s 500 index declined 7.13 points, or 0.36%, to trade at 1,979.92. The Dow Jones Industrial Average added nearly 14 points, barely 0.1%, to trade at 16,790.19 and the NASDAQ Composite closed 32.9 points, or 0.7% lower to trade at 4,748.36.
Following today’s announcement by the Bank of Japan that its current policies will stay in place, the Bank of England will offer its own interest rate decision and the Federal Reserve will reveal its latest minutes from the Federal Open Market Committee (FOMC). To conclude the week, Canadian employment data will be released on Friday.