HONG KONG: Asian stock markets extended their gains on Wednesday, with buying supported by another Wall Street rally as a positive reading on US growth and consumer spending renewed confidence in the world’s top economy.
Oil prices also enjoyed fresh buying—with the US benchmark at parity with its European counterpart after overtaking it Tuesday for the first time in nearly a year—while regional energy firms ticked higher.
US stocks climbed for a second day on data showing steady economic growth in line with expectations during July-September. Personal consumption, which drives about two-thirds of the economy, was also solid.
The figures settled some nerves on global markets after traders had grown concerned about the outlook owing to the plunge in oil prices and weakness outside the United States, particularly in China.
Last week’s euphoria over the Federal Reserve’s interest rate rise, which had boosted overall confidence in the economy, had also started to give way to caution about the bank’s plans for its next rise.
“Consumer spending looks like it’s helping the US economy,” James Lindsay, an Auckland-based fund manager at Nikko Asset Management, told Bloomberg News.
“Volumes tend to get pretty light at this time of year. Markets have had a reasonable run and value is a lot harder to come by.
“The key things are still what happens with China, the flow-on effects into commodities and what the Fed does and how that affects sentiment and currencies.”
Crude prices saw a rare second-straight gain after climbing Tuesday, when WTI topped Brent for the first time since January.
In the afternoon in Asia WTI was up 0.7 percent at $36.40 and Brent added 0.8 percent to also sit at $36.40. The once-wide spread between the two contracts has narrowed since Washington last week passed a bill lifting a 40-year ban on US oil exports which analysts said could ease a glut in the country.