Energy Shares Carry Stocks to Records
Australia stocks at highest since 2008
-- Oil prices hold gains
-- Dollar rises, commodity currencies soften
Shares of global energy companies continued to climb Tuesday, helping send stocks in Europe and Asia to multiyear highs.
The Stoxx Europe 600 edged up 0.3% in early trading, on track for its highest close since 2015. That came after a rally in energy shares helped send the S&P 500, Dow Jones Industrial Average and Nasdaq Composite to records together Monday for the 26th time of the year.
Brent crude oil jumped 3.5% Monday to heights not seen since 2015 on rising tensions in the Middle East following a wave of arrests in Saudi Arabia, and edged up another 0.2% to $64.38 a barrel on Tuesday.
Shares in oil giants BP and Royal Dutch Shell were up 0.4% and 0.9% respectively, helping send Europe's oil-and-gas sector up 0.8%.
"I see rising oil prices as a short-term positive for equities," said Chris Hiorns, fund manager at EdenTree Investment Management. Stronger balance sheets at big oil companies could mean more capital expenditures, boosting the industrial sector more broadly, he said.
Mining companies were up, too, with shares of Glencore rising 0.8% and BHP Billiton up 1.3%.
Shares of Danish shipping and oil conglomerate A.P. Moeller-Maersk fell 5.2%, muting wider gains, after it reported a slide to a net loss for the third quarter of the year.
Earlier, shares of Japan Petroleum jumped 6% and Inpex climbed 3.7%, helping push Japan's Nikkei up 1.7% to reach levels last seen in early 1992.
Hong Kong's Hang Seng's extended its Monday rebound to approach 10-year highs. Chinese oil majors gained, as well as index heavyweight Tencent, which helped the Hang Seng rise 1.2%. Tencent spinoff China Literature goes public on Wednesday.
Australia's benchmark exceeded its 2015 peak to hit its highest point since early 2008--aided by commodities, arguably the country's biggest business.
Australian stocks notably lagged behind the region throughout 2017 but recovered more recently as prices for stocks and commodities rose globally, adding 1% on Tuesday. Major mining companies BHP Billiton and Rio Tinto led the day's gains to hit their best levels in two years and six years respectively.
The sector was helped by a further rebound in Chinese iron-ore prices, which recently hit four-month lows. China's environmental restrictions on polluting steel mills also helped steel and iron ore prices rally after weeks of declines. Futures prices on the Dalian Commodity Exchange in China shot up about 5% Monday and rose another 2.5% during Tuesday morning's session.
The Reserve Bank of Australia kept to its script at its policy meeting, keeping interest rates at the record low of 1.5%.
The Australian dollar edged down 0.3% against the U.S. dollar. The WSJ Dollar Index, which tracks the U.S. currency against 16 others, was up 0.2%.
Commodity-sensitive currencies including the Russian ruble, Norwegian Krone and Canadian dollar edged slightly lower Tuesday, giving back some of Monday's gains that came alongside the jump in oil prices.
The correlation between the performance of the price of oil and oil-related currencies has weakened over the last year, according to Lee Hardman, currency analyst at MUFG.
James Glynn contributed to this article.
Write to Riva Gold at riva.gold@wsj.com, David Hodari at David.Hodari@dowjones.com and Kenan Machado at kenan.machado@wsj.com
(END) Dow Jones Newswires
November 07, 2017 03:53 ET (08:53 GMT)