Asian markets were stronger Wednesday, shrugging off the burden of near $120-a-barrel oil and a record high euro, to continue a rally that has recovered all the ground lost last month. Shanghai surged over 4 percent, while Australia gained 1.6 percent.
The dollar touched a record low of $1.60 to the euro on Tuesday, before recoiling to $159.74 in early Asian trade on Wednesday. The weak greenback has helped buoy prices for dollar-denominated commodities such as oil.
Expectations that the European Central Bank would stay vigilant on inflationary pressures -- possibly meaning an even stronger euro -- helped push U.S. crude oil prices to a record high of $119.90 a barrel on Tuesday. Oil Asian markets were stronger Wednesday, shrugging off the burden of near-$120 a barrel oil and a record high euro to continue a rally that has recovered all the ground lost last month. pulled back to $118.05, still high enough to dent fuel-dependent stocks such as airlines. Korean Air, the world's top cargo carrier, Japan Airlines and Australia's Qantas were all lower.
But the surge in oil prices lifted energy firms such as Australia's Woodside Petroleum, China's PetroChina and Japan's Nippon Oil. Miners including Sumitomo Metal Mining rose on higher gold and copper prices.
The Nikkei 225 Average edged up by 0.2 percent, with oil's surge boosting energy plays and resource-linked firms such as trading house Mitsui & Co.. Rising global food prices helped lift agricultural stocks such as Nissan Chemical Industries, whose major profit-earners include agrochemicals, as well as Kubota, a major maker of farm equipment.
South Korea's KOSPI closed higher with gains by steelmakers such as POSCO offsetting losses by technology shares after their recent steep gains and on persistent worries about memory chip market outlook.
Australian shares rose 1.6 percent to a two-month closing high, as Australia and New Zealand Banking Group led other banks higher after it posted first-half earnings that reassured investors. Resource firms such as BHP Billiton and Woodside gained on strong oil and metal prices, further boosting the market.
Hong Kong stocks ended 1.4 percent higher, helped by gains in oil firm PetroChina and coal miner China Shenhua.
Singapore's Straits Times Index closed 0.4 percent higher. Water treatment company Hyflux jumped almost 10 percent after it announced on CNBC Asia that it had won an order worth $468 million for a seawater desalination plant in the Oran region in western Algeria.
China's Shanghai Composite Index surged 4.2 percent, led by financials and oil firms, as the market bounced from technical support and fund managers said regulators had asked some funds not to dump shares. Two fund managers, who declined to be identified, said the China Securities Regulatory Commission had again asked some fund management firms not to cut
their equities holdings. This fueled talk that the index might finally be finding a bottom around
3,000 points, as any clean break below that level would trigger further action by regulators to rescue the market.