Asian Equities Rise on OPEC Deal with Nikkei 225, ASX 200, Hang Seng and STI All Up on Thursday

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The major indices across Asia were up on Thursday as news that the OPEC summit held in Vienna on Wednesday had resulted in an agreement to reduce combined output by 1.2 million barrels a day. Earlier in the week hope that a deal could be reached had been fading, with the likelihood of it happening put at around 30% by analysts. The eventual agreement, which was also for a bigger reduction than most thought possible as well as involving non-OPEC exporters such as Russia contributing a further 600,000 barrels a day cut in output, has pleasantly surprised markets.


Japan’s Nikkei 225 reacted to the news by finishing the Thursday session 1.12% up. It may have been more if it had not been for mixed economic data releases during the day. Japan’s manufacturing sector expanded in November at a PMI of 51.3, slightly down on October’s 51.4 reading but still a positive direction. However, capital spending for Q3 missed expectations and was down 1.3% against a forecast 0.4%.

The Nikkei’s biggest gainer on Thursday turned out to be, as would have been expected, an oil company. Inpex gained 9.95% with a number of other companies in the oil industry among the day’s best performers. JX Holdings was up 7.5%, Showa Shell Sekiyu, which is the Japanese base of Royal Dutch Shell, 6.56% and Chiyoda Corp 5.97%. Engineering and manufacturing companies also did well and the second largest gainer for Thursday was engineers JGC, up 8.05% and bearings manufacturer NSK, with a 5.78% increase. Financials and banks are also getting a lift from the rising oil price and Nomura saw a 5.94% uplift.

In Australia, the commodities and energy-heavy ASX 200 added 1.1%. Oil and gas company Santos rose by a whopping 12.21% and Beach Energy 11.25%. WorleyParsons, engineer and consultant to the energy sector added 9.94%. Thursday fallers were Saracen Mineral Holdings which lost 6.81%. The company has recently agreed a AU$150 million debt facility and is on the lookout for new assets in oil and gold mining. Evolution Mining was down 6.49% and construction software company Aconex fell by 6.35%.

The Hang Seng was up a more modest 0.39%. Oil giant CNOOC was the index’s biggest winner, adding 6.13%. Another list of oil industry players featured prominently in the day’s top risers with PetroChina Co. (4.74%), China Petroleum and Chemical (2.4%) and Kunlun Energy (1.23%) all featuring on the leaderboard. Telco China Unicom Hong Kong followed on from yesterday’s gains to add 4.35% as did sanitary napkins and diapers manufacturer Hengan International with a 2.05% gain.

Property investment companies were among yesterday’s biggest Hang Seng risers but find themselves on the other side today. Sino Land was down 3.77%, Wharf Holding 1.3% and Link REIT 1.12%. Macau casino operator Galaxy Entertainment also saw a correction following strong gains and lost 2.6%.

In Singapore the STI is up by 0.57%. Yesterday’s big faller Sembcorp Marine has added 5.73% today while Sembcorp Industries is up 7.04%. Hongkong Land Holdings is down 2.5%.

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