Asia stocks up after European Central Bank signals easing, oil extends rally

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Pedestrians are reflected on an electronic stock board at a securities firm in Tokyo, Friday, Jan. 22, 2016.

Japan’s Nikkei share average scored its biggest single-day gain in 4-1/2 months on Friday, helped by a weaker yen, a bounce in oil prices and a hint of more stimulus from European Central Bank president Mario Draghi. Speculation for more easing also favoured Tokyo shares amid the hope that the Bank of Japan would opt for additional stimulus at its January 28-29 policy meeting.

In early European trading, France’s CAC 40 added 2.1 percent to 4,923.55 and Germany’s DAX rose 1.6 percent to 9,729.57.

Draghi said euro-area monetary policy will diverge from the USA for a while.

At the previous ECB meeting in December, the rate had been cut from -0.2% in an attempt to push banks to lend instead of parking money at the ECB.

The ECB is already pumping €60bn a month into markets via bond purchases and has slashed its main interest rate to 0.05%, but Mr Draghi said it would “review and reconsider” this in March in the wake of the latest global turmoil and that there were “no limits” to how far it could go.

Japan’s Nikkei surged 5.9pc at the close, the most in more than four months, moving away from a 15-month low struck Thursday.

The Hang Seng China Enterprises Index rose 1.8 percent at the noon break.

In the United Kingdom, the FTSE 100 gained 100.21 points to close 1.8 percent higher at 5,773.79 yesterday, having entered bear market territory earlier this week. Benchmarks in Taiwan, Southeast Asia and New Zealand also ended higher.

USA crude oil CLc1 extended a rally made overnight after data showed stockpiles at some US sites did not grow as much as forecast, providing participants in the battered market with an incentive to cover short positions.

World stocks recorded their biggest rise in a month and Asian stocks their best day in three months.

Energy shares led the advance in US stocks, which surged more than 1 percent in morning trading. Brent crude, a benchmark for worldwide oils, rose $1.52 to $30.78 a barrel in London.

The dollar was up 0.3 percent against the yen at 118.03 yen, pulling away from a one-year trough of 115.97 struck earlier this week against the safe-haven Japanese currency. AP material published by LongIsland.com, is done so with explicit permission. The euro weakened on the prospect of further stimulus, slipping to $1.0845 from $1.0851. Doing so may result in civil and/or criminal penalties.

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