Australian shares rose 0.4 percent on Monday, reversing early losses as energy, mining and financial stocks found favour, though volumes were below average as investors remained cautious after the market's recent volatility. After a weaker start on a spike in oil prices and continued unrest in oil-producing nations, the local market was given a fillip when Shanghai's benchmark stock index rose, despite the Chinese central bank again increasing banks' required reserves.
"The Chinese outlook still seems pretty solid and commodity prices are still quite high. There are a lot of risks to that outlook with the high oil price and geopolitical risks, but in the medium term the broader market is pretty positive on the equity market," said Richard Morris, portfolio manager at Constellation Capital Management. "You would need to see a major negative out of either (the US or Chinese) market to change the positive sentiment," he said. The benchmark S&P/ASX 200 index rose 16.4 points to 4,642.8, according to the latest data. It rose 1.6 percent on Friday, the biggest daily gain in 3-1/2 months, but was still down slightly for the week.
New Zealand's benchmark NZX 50 index rose 0.3 percent to 3,348.4. The rise in oil prices boosted energy firms, with Woodside Petroleum up 1.8 percent at A$45.20 and Santos up 1.1 percent at A$15.22. Brent crude for May rose as much as $2.29 to $116.22 a barrel. Investors also say shaken confidence in the nuclear power sector could also boost demand for oil and gas.
In Japan, markets were closed for a holiday. Efforts to stabilise quake-damaged nuclear plants continued and engineers restored electricity to three reactors and hope to test water pumps at the quake-damaged facility soon. "We haven't really seen any bad news for some days so the situation certainly hasn't deteriorated. Quite a few people seem to think that the Japanese are making pretty reasonable progress," said IG Markets analyst Ben Potter. Banks finished higher, led by a 1.5 percent gain in ANZ Banking Group to A423.04. Bourse operator ASX Ltd was down 1.8 percent at A$34.18 after several media reports saying the government was set to reject a planned merger with Singapore Exchange.