Asian Markets Rise as Oil Prices Decline Following U.S. Rally

Asian shares experienced a positive surge on Friday, influenced by the confirmation of a meeting between U.S. President Donald Trump and Chinese leader Xi Jinping scheduled for next week. This announcement alleviated some uncertainty regarding ongoing trade tensions between the two nations, although the likelihood of a substantial trade agreement remains ambiguous.

Chinese markets responded favorably after the ruling Communist Party concluded a significant planning meeting, which yielded no major policy changes. The Hong Kong Hang Seng index increased by 0.6%, reaching 26,122.10, while the Shanghai Composite index rose 0.4% to 3,938.98. Japan’s Nikkei 225 index rebounded from previous losses, climbing nearly 1.5% to 49,380.25.

Inflation Pressures and Economic Indicators

Support for market optimism was bolstered by data revealing that Japan’s core inflation rate rose to 2.9% in September, up from 2.7% in August. Despite these inflationary pressures, the Bank of Japan is anticipated to maintain unchanged interest rates at an upcoming meeting, as newly elected Prime Minister Sanae Takaichi has expressed a preference for low rates.

In South Korea, the Kospi index surged by 2.3% to a record high of 3,935.75, buoyed by positive sentiment from Wall Street and the news of the Trump-Xi summit. Conversely, Australia’s S&P/ASX 200 index experienced a slight dip of less than 0.1% to 9,027.00, following preliminary reports indicating a contraction in factory activity to 49.7 in October from 51.4 in September. India’s BSE Sensex remained relatively unchanged, while Taiwan’s stock market was closed for a holiday.

Wall Street Rally and Oil Market Dynamics

The rally in U.S. stocks on Thursday set the stage for the Asian market gains. The S&P 500 rose by 0.6% to 6,738.44, just 0.2% shy of its all-time high earlier this month. The Dow Jones Industrial Average added 0.3% to 46,734.61, also hovering near its recent record. The Nasdaq composite increased by 0.9% to 22,941.80.

Significant increases in oil and gas stocks contributed to this upward momentum, as oil prices surged following President Trump’s announcement of “massive” new sanctions targeting Russia’s crude oil industry. Companies like Exxon Mobil saw gains of 1.1%, while ConocoPhillips and Diamondback Energy climbed by 3.1% and 3.4%, respectively. The sanctions aim to persuade Russian President Vladimir Putin to cease hostilities in Ukraine and could have implications for global oil supplies.

Despite the recent rally, oil prices experienced a slight decline on Friday morning. U.S. benchmark crude fell by 22 cents to $61.57 per barrel, while Brent crude decreased by 21 cents to $65.78. Overall, oil prices remain down more than 10% for the year.

Profit reports from major U.S. corporations also supported market gains. Dow Chemical saw a remarkable increase of 12.9%, while Las Vegas Sands surged 12.4% following stronger-than-expected earnings. Even Tesla managed a recovery, climbing 2.3% after reporting weaker profits but stronger revenue than anticipated.

As companies face increasing pressure to deliver solid growth, investors are monitoring performance closely. This comes in the wake of a 35% increase for the S&P 500 since its low in April, raising questions about sustainability.

In commodities trading, the price of gold slipped 0.4% to $4,129.30 an ounce after climbing 2% the previous day. The U.S. dollar strengthened against the Japanese yen, rising to 152.96 from 152.60, while the euro fell to $1.1608 from $1.1618.

The interplay between global markets, commodity prices, and economic indicators will continue to shape investor sentiment in the coming weeks.