Asian shares lifted by US data; oil slides

Asian shares got a lift on Friday after upbeat US data suggested weaker oil prices are adding momentum to the American economy, though a continued slide in crude prices kept gains in check.

US crude futures continued to drop after falling below the key psychological support level of $60 a barrel for the first time in five years, and stood at $59.30 in Asia, down more than 1 per cent on the day.

Brent crude continued its march downwards on Friday and dropped to a 5-1/2-year low of $63 a barrel, bringing this week’s losses to more than 8 per cent. It was last down 0.5 per cent at $63.40.

Asia-Pacific shares

MSCI’s broadest index of Asia-Pacific shares outside Japan edged up about 0.2 per cent, though on track for a loss of over 2 per cent for the week.

Japan’s Nikkei stock average added 1 per cent, extending gains as the US data lifted exporters’s shares, but was poised to book a loss of nearly 3 percent for the week.

“Increasing consumption in the US is a big boost for Japanese exporters,’’ said Masayuki Otani, chief market analyst at Securities Japan, Inc.

Global crude prices have plunged in recent weeks on massive oversupply, raising fears that deflation could hit economies around the world. But data on Thursday showed that cheaper gasoline prices apparently helped US consumer spending mark broad rises last month, and jobless claims also fell.

Senate nod for extension of govt funding

One potential risk on the horizon got a temporary reprieve, when the US Senate approved a two-day extension of government funding late on Thursday to stave off shutdowns of federal agencies that otherwise would have begun at midnight.

Wall Street ended higher on Thursday, but Asian investors have mostly focused on the downside of lower energy costs, which dragged down equities here this week.

“The relentless decline in oil prices continues to unsettle risky asset markets. Oil prices have fallen to levels last reached in mid-2009, as OPEC cut its demand forecast to a 12-year low despite lower prices, and U.S. crude inventories rose,’’ Barclays strategists said in a note.

Dollar vs other currencies

The US data helped the dollar wrest itself off a two-week low of 117.44 yen, and was last flat on the day at 118.63 yen .

The euro slipped about 0.1 per cent to $1.2396, after top-rated euro zone bond yields inched lower on Thursday following a tepid response by banks to the European Central Bank’s second round of long-term loans.

Investors awaited Chinese retail sales data, industrial output and fixed-asset investment data for November, to gauge the strength of the world’s second-largest economy. Any signs of weakness are likely to raise expectations that Beijing will deliver further easing steps.

Spot gold slipped about 0.3 per cent to $1,222.50 an ounce, though it was still on track for a gain of over 2 per cent for a week in which it marked a seven-week high on Wednesday.

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