Asian shares shrug off energy blues

TOKYO: Asian shares rose on Tuesday, taking heart from record closes on Wall Street and upbeat economic data that lifted U.S. Treasury yields and the dollar, even as weaker oil prices took their toll on energy stocks.

Futures suggested an firm start to the European trading day, with the Eurostoxx 50 up 0.3 percent and FTSE futures up 0.1 percent. MSCI´s broadest index of Asia-Pacific shares outside Japan was 0.4 percent higher in afternoon trade, clawing back losses from earlier in the Asian day.

Japan´s Nikkei stock index ended up 1.1 percent as a tailwind from a weaker yen helped power it to its highest levels since August 2015.Markets in China and South Korea were closed for holidays.

Hong Kong´s Hang Seng index rose 1.9 percent as trading resumed following a public holiday on Monday, led by mainland banks and insurers after China´s central bank cut reserve ratios over the weekend to encourage lending.

Materials shares also gained after Beijing reported stronger-than-expected September factory activity. The Hong Kong China Enterprises Index rallied 3.2 percent. Australian shares slipped 0.5 percent, pressured by financial and energy shares.

The energy index, which has moved largely in tandem with the main index in recent sessions, skidded 1 percent in line with weaker crude prices. As widely expected, the Reserve Bank of Australia kept interest rates on hold at a record low of 1.5 percent. The RBA said a stronger local currency would slow the economy and restrain price pressures.

The dollar index, which tracks the greenback against a basket of six major rivals, added 0.3 percent to 93.839, after nudging up to its highest levels since Aug. 17. The euro eased 0.2 percent to $1.1709, facing pressure from Spain´s biggest constitutional crisis in decades, after Sunday´s violence-marred independence referendum in Catalonia opened the door for its wealthiest region to move for secession as early as this week. The dollar added 0.3 percent against its Japanese counterpart to 113.11 yen, within sight of last week´s two-month high of 113.26 yen.

Proposed U.S. tax code changes as well as the possibility that U.S. President Donald Trump will appoint a more hawkish Fed Chair also gave the dollar a lift. Crude oil futures extended losses after tumbling on Monday, as a rise in U.S. drilling and higher OPEC output put the brakes on their recent rally and rekindled concerns about oversupply.

Brent crude slipped 0.4 percent to $55.90 a barrel, after marking a third-quarter gain of about 20 percent. U.S. crude fell 0.3 percent to $50.42."The fourth quarter is not too kind to the price of oil, as we switch from summer demand to expectations of winter demand," said Jonathan Barratt, chief investment officer at Ayers Alliance in Sydney.

On Wall Street on Monday, U.S. stocks started the fourth quarter on a strong note, with all three major indexes closing at record highs after data underscored strength in the economy. A measure of U.S. manufacturing activity surged to a near 13-1/2-year high in September.