Stocks in Hong Kong Soar, Oil Makes Gains

Traders in Asia saw stocks soar at levels last seen 2 years ago, on Tuesday while oil made gains after the world’s two major oil producers, Saudi Arabia and Russia backed extending the oil cuts for a further 6 months.

Outside of Japan, the MSCI broadest index of Asia-Pacific shares soared to levels last seen in June 2015.

Brent crude gained 0.4 percent to $52 per barrel.

US West Texas Intermediate crude gained 0.4 percent at $49.03 per barrel.

Currencies

The dollar fell 0.3 percent against the yen to 113.47 while the euro gained 0.2 percent to $1.0994.

The concerns by investors of the news that US President Trump discussed classified information with Russia affected the decline in the US dollar and saw the euro making gains. Adding to the greenback’s decline was the release of weak data for April housing starts and building permits, despite the report of a better than expected rise in April industrial production. Business activity for the month of May fell unexpectedly for the first time since October, according to the New York Federal Reserve barometer on Business activity. Investors now wonder whether the Federal Reserve Bank will raise interest rates twice this year as they planned. Polls conducted indicate that the chances of a rate increase in June fell to 74 percent, which was at 84 percent last week.

Precious Metal

Gold made slight gains and was trading at $1,233 per ounce.

Fund manager at Ample Capital Ltd in Hong Kong, Alex Wong said that the market momentum looks tired with short term resistance as the breadth of the rise which is unhealthy.

Investors are becoming wary as overall volumes decline with share valuations becoming stretched.

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