Asian markets rise on expectations of Chinese stimulus

Asian stocks were higher as speculation around an imminent Chinese stimulus plan leaked to the market. There still is no firm announcement or details though.

The regional MSCI Asia Pacific index was 0.7% higher in early afternoon Tokyo trading. S&P500 index futures were pointing to a gain of around 0.8% after yesterday’s market close.

Copper was last trading at around US$3.48/lb, holding its ground and perhaps looking for a rally tonight should details emerge of a Chinese plan.

That flowed through to the Australian dollar which was last trading at 98.61 US cents. The Euro was flat at around 125.35 while the dollar yen remains in a very tight trading range, last at 79.55.

In regional corporate news, automakers were higher in Shanghai ahead of the speculation around stimulus. Great Wall Motors was 5% higher after it was specifically identified as a potential beneficiary from government easing policies. 

The Shanghai Composite index was 1.1% higher in early afternoon trading. Volatility was at a three day high.

The Australian ASX200 index was similarly higher, going into the closing minutes up around 1.1%. Beaten down emerging players were among the best performers. Dart Energy announced plans to shelve its Singaporean IPO of its non-Australian assets, causing the share price to rally strongly as short sellers looked to close their bets after months of consistent price falls.

In energy markets, Brent was sitting slightly higher at US$108 per barrel while crude oil last traded at around US$91.32, up around 0.51%. While most of the recent attention has been around Iran, we note with interest new data that shows Iraq produced its highest monthly output since April 1989.

Iraq reportedly exported 2.5 million barrels of oil per day (bpd) and produced around 3.03m for the month. The numbers were 7% higher than March and the highest figure since the 2003 fall of the prior leadership. Baghdad plans to increase production levels from its southern oilfields to roughly 8-8.5 million bpd by 2017.