A global rally struggled to extend into Asian hours on Tuesday, although gains in energy and material stocks capped the extent of losses.
Shares in the region were mixed.
Japan’s Nikkei Stock Average
pared earlier gains, last up 0.1%, while the Hang Seng Index
traded near flat. The Shanghai Composite Index
was down 0.6%, Australia’s S&P/ASX 200
was down 0.2% and South Korea’s Kospi
was off by 0.1%.
Australian mining giant BHP Billiton Ltd.
rose 2.4%, as bargain-buying lifted some of the region’s most battered stocks from this year’s global market rout.
BHP’s stock, which has lost about 42% in the past 12 months amid a prolonged downturn in commodity prices, was up, even after the firm slashed its dividend, the clearest sign yet of the deteriorating backdrop for the global mining industry.
Shares of Noble Group Ltd.
were down 2.7% in Singapore, after the commodities trader said it will record a one-time loss of $1.2 billion in its fourth-quarter to reflect lower assumptions of long-term coal prices. The stock is off 65% in the past 12 months.
On Monday, global stocks had rekindled their rally from last week, spurred by rising commodity prices overnight. The Dow industrials gained 1.4% on Monday, also led by energy and raw materials companies.
That gave Asia a lift in the morning. But Chinese markets opened slightly weaker.
Brent crude oil was down 1.1% at $34.32 a barrel in early Asia trade. That followed U.S. crude futures gaining 6.2% to $31.48 a barrel overnight, after the International Energy Agency said it expects U.S. shale-oil production to fall by 600,000 barrels a day in 2016.
Still, “as the markets shake off one of the worst starts to the year on record, the risk-reward points to the upside in exploring oil-related plays,” said an analyst report by Jefferies. The firm noted how oil prices have been leading stocks in the region this year, with markets bouncing back quickly in recent occasions when oil prices broke below the symbolic $30-a-barrel level.
Energy shares were up 0.2% in Australia, and up 1% in Hong Kong.
One Australian dollar was up 0.3% at $0.7240, close to its highest levels since early January. The Australian dollar was also the best performing currency overnight, and brokerage IG thinks it can reach $0.735.