Asia shares win reprieve after oil rebound

Thu Jan 14, 2016 7:36pm EST
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By Hideyuki Sano

TOKYO (Reuters) - Asian stocks won a temporary reprieve on Friday after oil prices snapped their eight-day rout, helping to lift battered energy shares even as investors remained on edge as they looked for signs of stability in China's economy and its volatile markets.

MSCI's broadest index of Asia-Pacific shares outside Japan, which hit a four-year low on Thursday, rose 0.5 percent while Japan's Nikkei jumped 1.8 percent.

Oil prices rebounded on Thursday, with international benchmark Brent futures rising 2.4 percent to $31.03 a barrel, recovering from its 12-year low of $29.73 hit earlier in the day. [O/R]

Although that was largely driven by short-covering after a 20 percent fall since the start of year, it helped to lift U.S. shares from three-month lows.

The S&P 500 gained 1.7 percent on Thursday, led by a 4.5 percent rise in the energy sector.

The markets was also helped by comments from St. Louis Federal Reserve President James Bullard that the continued rout on global oil markets has caused a "worrisome" drop in U.S. inflation expectations that may make further rate hikes hard to justify.

U.S. retail sales data due later on Friday will be on investors' radar as they try to gauge the likelihood of the Fed raising rates in March.

In Asia, fears that Chinese authorities may not be able to manage a decelerating economy are also ebbing as efforts by China's central bank to stabilize the yuan has paid off for now - albeit via heavy intervention.   Continued...

An investor checks stock information on a mobile device at a brokerage house in Shanghai, China, January 8, 2016.  REUTERS/Aly Song