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Asian markets extend rally, oil edges up on China reopening

China, the world's second-biggest oil consumer, opened its borders on Saturday for the first time in three years, buoying the outlook for its demand for transportation fuels as well as the global economy.

AP

Sydney, Seoul, Singapore, Taipei, Manila and Jakarta also enjoyed a strong start to the week.

Asian markets rallied and oil prices edged higher as hopes for less aggressive US rate hikes and the opening of China's borders bolstered the outlook for the global economy.

Asian equities started Monday on the front foot, with Hong Kong up more than two percent and Shanghai also well up.

Traders in the two cities have been on a high at the start of the year as they welcome China's emergence from zero-Covid as well as pledges to help the struggling economy, particularly the property sector.

The borders between Hong Kong, Macau and China were partially opened Sunday, providing a much-needed boost to the city. Macau-based casinos surged on the move.

"The U-turn in China's Covid policy is consequential to growth and equity returns," said SPI Asset Management's Stephen Innes.

"So with the lifting of border restrictions between China/Hong Kong/Macau and international travel reopening, local travellers are not only in a celebratory mood but also investors."

Sydney, Seoul, Singapore, Taipei, Manila and Jakarta also enjoyed a strong start to the week.

Oil prices rise

Oil prices also edged up, a day after travellers streamed into China following a reopening of borders.

Brent crude futures had risen 53 cents, or 0.7 percent, to $79.10 a barrel by 0114 GMT while US West Texas Intermediate crude was at $74.23 a barrel, up 46 cents, or 0.6 percent.

Hopes for less-aggressive US interest rate rises are buoying financial markets and depressing the dollar. A weaker greenback makes dollar-denominated commodities more affordable for investors holding other currencies.

Both Brent and WTI tumbled more than 8 percent last week, their biggest weekly dives at the start of a year since 2016.

"Crude oil futures had their biggest weekly losses in a month due to recession fears as oil prices have been positively correlated with inflation since 2022, though China's reopening may buffer the decline in the near term," CMC Markets analyst Tina Teng said in a note.

SOURCE: TRTWorld and agencies