ASIA MARKETS: Oil Gains Lift Most Asian Markets, But China Sags On Liquidity Worries

By Kenan Machado Features Dow Jones Newswires

Asian stocks were broadly higher on Thursday, getting a lift from rising oil prices, but liquidity concerns weighed on markets in China.

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Crude prices logged their biggest daily gains since December on Wednesday amid declines in U.S. inventories last week. Brent futures rose 0.5% in recent Asian trading to reach $50.47 a barrel after climbing 3% Wednesday.

Read:Oil boosted by signs U.S. crude glut is shrinking (http://www.marketwatch.com/story/oil-boosted-by-signs-us-crude-glut-is-shrinking-2017-05-11)

In China, a note was posted on an official WeChat account run by the state-owned Securities Times, saying the country's stock regulator summoned brokers with large capital pools for a meeting on Monday to ease concerns about a crackdown in the shadow-banking sector. The regulator clarified that the crackdown is targeted at nonstandard assets and doesn't include bonds.

"The regulator realized that existing capital pools owned by brokers may hold as much as hundreds of billions of yuan, which are concentrated in bonds. Any forceful cleanup will cause a huge blow to the bond market, and even trigger liquidity crisis," said the Securities Times notes, quoting a brokerage manager.

The Shanghai Composite hit a seven-month low and was recently down 0.4%, while the Shenzhen Composite slid 1.3%.

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While Chinese markets have slid recently, they have been an outlier. A number of other stock indexes in Asia have been hitting multiyear or record highs, as have markets in the U.S. and Europe.

In New Zealand, the NZX-50 was up 0.9% ahead of the market close, hitting an eight-month high after a central-bank policy statement that was interpreted as dovish. The New Zealand dollar fell some 1.5% versus the greenback, good news for export-reliant firms if maintained as a weaker currency makes wares from there less expensive outside the country.

Oil stocks in Australia and elsewhere rose on the oil gain. But the S&P/ASX 200 was off session highs in afternoon trading with a gain of 0.3%. Shares of Australia's biggest lenders have been weak after their latest earnings results and were hit Wednesday by news of a proposed banking tax.

"We are seeing some corrective action," said Michael McCarthy, chief market strategist at CMC Markets. "Analysts have got a chance to factor in this new tax into their models." The banks' stock gains cooled to less than 1%.

Elsewhere in the region, South Korea's Kospi was looking to notch a fresh record closing high as stocks there rebound from Wednesday's 1% postelection pullback. The index, one of the region's best performers this year, was recently up 1%.

"Investment sentiment for the Korean stock market is expected to remain positive for the coming months, backed by sound corporate earnings," said John Park, chief investment officer of Baring Asset Management Korea. "The market may continue to rally significantly if retail investors return to the market."

The Nikkei rose 0.3%, aided by the dollar remaining above the Yen114 level. It also remains slightly below 20000, a level the index hasn't been above since December 2015.

In Singapore, commodities trader Noble tumbled 22%, hitting a 14-year low, after warning of a big first-quarter loss. The company has been struggling amid losses caused by low commodity prices, especially coal. The company a week ago cut its share count 90% through a 1-for-10 reverse split amid hopes of boosting the stock and stemming regular price volatility in the stock.

--Yifan Xie, Jenny W. Hsu and P.R. Venkat contributed to this article.

(END) Dow Jones Newswires

May 11, 2017 02:08 ET (06:08 GMT)