Wednesday, July 13, 2016

Shares in Asia Continue its Gains as risk appetite improves

Nikkei Stock Average

Asian equity markets continue making gains and they are within reach of their 2016 highs on Wednesday as the anticipation of solid U.S. growth and likelihood that Japan may consider an aggressive form of policy easing to boost their economy brightens investors outlook despite the damaged done by uncertainty from Brexit.

The Nikkei Stock Average was up 1%, paring earlier gains, while the yen changed tack to trade 0.6% stronger against the U.S. dollar. Earlier Wednesday, the Nikkei had recovered all its losses from before the Brexit vote when the index was up 1.6%.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose as much as 0.4% to 427.83, just below its year-to-date high of 428.22 hit on April 21.

Australian stocks added 0.5% and South Korea's Kospi .KS11 rose 0.6% New Zealand shares .NZ50 inched down 0.1% but were near a record high struck Tuesday. Shanghai .SSEC advanced 0.4%.

"A while ago, everything looked so uncertain on Brexit. But now that the UK looks set to have a new prime minister ... that is soothing investor sentiment," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

Britain's interior minister Theresa May is set to take over as prime minister on Wednesday.

Elsewhere, Philippine shares .PSI reached a more than 1-year high and Vietnam .VNI scaled an 8-year peak.

In commodities, oil prices dropped after industry group American Petroleum Institute (API) reported a surprise build of 2.2 million barrels in U.S. crude stockpiles last week.

Brent crude futures LCOc1 fell 1.2% to $47.90 after surging roughly 5% on Tuesday on broad improvement in risk sentiment.

Zinc CMZN3 touched a 13-month high of $2,210 a tonne and nickel climbed to a 10-month peak of $10,670 a tonne CMNI3. Aluminum and copper have also gained.

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