Personal consumption drives about two-thirds of the economy in the US
Hong Kong - Arab Today
Asian stock markets extended their gains on Wednesday, with buying supported by another Wall Street rally as a positive reading on US growth and consumer spending renewed confidence in the world's top economy.
Oil prices also enjoyed fresh buying -- with the US benchmark at parity with its European counterpart after overtaking it Tuesday for the first time in nearly a year -- while regional energy firms ticked higher.
US stocks climbed for a second day on data showing steady economic growth in line with expectations during July-September. Personal consumption, which drives about two-thirds of the economy, was also solid.
The figures settled some nerves on global markets after traders had grown concerned about the outlook owing to the plunge in oil prices and weakness outside the United States, particularly in China.
Last week's euphoria over the Federal Reserve's interest rate rise, which had boosted overall confidence in the economy, had also started to give way to caution about the bank's plans for its next rise.
"Consumer spending looks like it's helping the US economy," James Lindsay, an Auckland-based fund manager at Nikko Asset Management, told Bloomberg News.
"Volumes tend to get pretty light at this time of year. Markets have had a reasonable run and value is a lot harder to come by.
"The key things are still what happens with China, the flow-on effects into commodities and what the Fed does and how that affects sentiment and currencies.”
Crude prices saw a rare second-straight gain after climbing Tuesday, when WTI topped Brent for the first time since January.
- Energy firms gain -
In the afternoon in Asia WTI was up 0.7 percent at $36.40 and Brent added 0.8 percent to also sit at $36.40. The once-wide spread between the two contracts has narrowed since Washington last week passed a bill lifting a 40-year ban on US oil exports which analysts said could ease a glut in the country.
However, Bernard Aw, market strategist at IG in Singapore, said the outlook for the commodity, which is around 60 percent off its high of above $100 in summer 2014, was still "bearish" due to a global oversupply.
Attention is now on a weekly stockpiles report later in the day from the US Department of Energy.
Energy firms were buoyant after a painful year. Sydney-listed Rio Tinto surged 4.2 percent and BHP Billiton was up 3.5 percent, with a rise in iron ore prices also providing support.
CNOOC, PetroChina and Sinopec in Hong Kong all soared four percent while Woodside gained more than one percent in Sydney.
On stock markets, Hong Kong was up one percent in the afternoon, Sydney closed 0.5 percent higher and Seoul strengthened 0.3 percent. However, Shanghai succumbed to late profit-taking, slipping in the last 20 minutes to end 0.4 percent lower.
The dollar remains subdued against its main rivals. It bought 120.90 yen, well off last week's highs above 123 yen. The euro sat at $1.0930 -- heading towards $1.10 from just above $1.08 last week following the Fed rate rise, with speculation the next rise could be as late as April.
- Key figures around 0710 GMT -
Hong Kong - Hang Seng: UP 1.0 percent at 22,039.19
Shanghai -composite: DOWN 0.4 percent at 3,636.09 (close)
Sydney - S&P/ASX200: UP 0.5 percent at 5,141.80 (close)
Euro/dollar: DOWN at $1.0930 from $1.0954 late Tuesday
Dollar/yen: DOWN to 120.90 yen from 121.10 yen
Tokyo - Nikkei 225: closed
New York - Dow: UP 1.0 percent at 17,417.27 (close)
London - FTSE 100: UP 0.8 percent at 6,083.10 points (close)