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Asia Pacific stocks rise in “fragile” market environment, oil jumps more than 2%

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Vehicles are displayed in a window while electronic boards display inventory information on the Australian Stock Exchange operated by ASX.

Lisa Maree | Bloomberg | Getty Images

SINGAPORE – Asia Pacific markets traded higher on Monday as investors reacted to last week’s US employment report, which beat expectations and raised hopes for a faster economic recovery.

Australian stocks were in the green. The benchmark ASX 200 index rose 1.69% as all sectors traded higher and the heavily weighted financials sub-index rose 1.39%. Major banking and mining stocks rose: Commonwealth Bank stocks rose 1.86% while Rio Tinto rose 3.56%, Fortescue rose 2.22% and BHP rose 3.05%.

In Japan, the Nikkei 225 rose 0.96% as bank stocks rose. Mitsubishi UFJ Financial Group shares rose 2.35%, Sumitomo Mitsui Financial Group rose 2.32% and Nomura shares rose 3.58%. The Topix index gained 0.91%.

Meanwhile, the South Korean Kospi rose 0.55%.

Monday’s Asia Pacific session followed a wild day in U.S. markets last Friday as stocks rebounded from a sharp sell-off as a stronger-than-expected non-agricultural payroll report boosted optimism for a faster economic recovery improved.

“Investors remain concerned about the impact of the massive Biden fiscal attempt on longer-term interest rates, creating a fragile equity environment,” analysts at ANZ Research said in a morning note on Monday. “This defense can prevail until mid-March (Federal Open Market Committee).”

US aid package

The U.S. Senate passed a $ 1.9 trillion coronavirus aid package over the weekend that includes direct payments of up to $ 1,400 to most Americans. The bill is expected to be passed in the Democratic House this week and will be sent to President Joe Biden for signature before the March 14 deadline for signing unemployment benefits.

Last month, Fed chairman Jerome Powell told lawmakers that the US economy is far from its employment and inflation targets and that it will likely take some time to make significant further progress. He said inflation is still “weak” and that the Fed is committed to current policies, implying that interest rates are likely to remain low for now.

Currencies and oil

The US dollar traded at 91.893 versus a basket of its peers and hit an earlier high at 91.949. It was still trading higher than the previous week below 91.00.

Elsewhere, the Japanese yen changed hands at $ 108.35 per dollar, while the Australian dollar gained 0.27% at $ 0.7707.

Oil prices rose over 2% during Asian trading hours on Monday. US crude oil futures rose 2.01% to $ 67.42 and the global benchmark Brent 2.02% to $ 70.76.

Last week, OPEC and its oil producing allies said the group would keep production broadly stable until April, while Saudi Arabia added that it would extend its voluntary production of one million barrels a day until next month.

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Katherine Clark