HONG KONG: Energy firms led a rally in Asia equities markets on Wednesday after oil prices soared on hopes for a deal by producers to cut output, while the dollar settled back after its latest gains.
The advance on trading floors is the latest in a volatile week for global markets after Donald Trump's shock election victory, which has fanned uncertainty for the US and world economy.
News that the OPEC exporters club and non-member Russia were engaged in a push to agree a deal fuelled a rush back into crude, which has in recent weeks been hit by worries over the chances of a cut as well as a strong dollar.
Both main contracts rallied almost six percent Tuesday on renewed hopes OPEC can reach a deal before it holds its twice-yearly meeting at the end of the month.
"With OPEC production at record highs, meaning any cut has to get bigger by the day, any news that this mountain can be climbed by November 30th is seized upon," Jeffrey Halley, senior market analyst at OANDA, said in a note.
"With fast money flows dominating so many other markets at the moment it is no surprise that it was oil's turn," he said, adding: "We can expect more of this intra-day volatility over the next two weeks."
While Brent and West Texas Intermediate dipped in Asia Wednesday, the surge in crude lit a fire under regional energy-linked firms.
Among the big winners, Hong Kong-listed CNOOC soared 2.5 percent, Woodside Petroleum jumped more than three percent in Sydney and Inpex was almost four percent higher in Tokyo.
The gains filtered through to broader markets, with most major indexes tracking another record close on Wall Street.
Tokyo jumped 1.2 percent by the break as another jump in the dollar provided further support for exporters. The greenback touched 109.34 yen at one point late Tuesday before easing back, although it is still hovering around the 109 yen mark in Asia.
Analysts are tipping the dollar to hit the 110 yen range soon as investors bets on a sharper rise in US interest rates after Trump pledged to ramp up spending and cut taxes.
Hong Kong added 0.3 percent and Sydney and Singapore each put on 0.2 percent while Seoul was up 0.6 percent. However, Shanghai eased 0.2 percent.
Emerging economy markets -- dragged by worries over Trump's plans for US trade deals -- also staged a second day of gains as the volatility fuelled by the tycoon's election eases.
Manila, Taipei and Jakarta were all comfortably higher, although traders remain on edge.
The rally across Asia follows another advance in New York, where the Dow clocked up its fourth consecutive record high close and the S&P 500 and Nasdaq also surged.
A Commerce Department report showing retail sales solidly up in October also provided support.
- Key figures around 0230 GMT -
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Tokyo - Nikkei 225: UP 1.2 percent at 17,882.08 (break)
Hong Kong - Hang Seng: UP 0.3 percent at 22,389.04
Shanghai - Composite: DOWN 0.2 percent at 3,199.17
Euro/dollar: UP to $1.0746 from $1.0725
Dollar/yen: DOWN at 108.98 yen from 109.16 yen
Pound/dollar: UP at $1.2479 from $1.2455
Oil - West Texas Intermediate: DOWN eight cents at $45.73 per barrel
Oil - Brent North Sea: DOWN six cents at $46.89
New York - Dow: UP 0.3 percent at 18,923.06 (close)
London - FTSE 100: UP 0.6 percent at 6,792.74 (close)
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