BANGKOK: Southeast Asian stock markets rose on Thursday on upbeat sentiment after producer club Opec and Russia struck a deal to slash oil output, easing worries about a global supply glut.
The Organization of the Petroleum Exporting Countries (Opec) agreed to its first output limiting deal in eight years after Saudi Arabia dropped a demand that arch-rival Iran also slash output. Non-Opec member Russia also gave consent, making the deal its first coordinated action with Opec in 15 years.
After the Opec announced the cut of 1.2 million barrels per day to its output, Brent crude futures shot up as much as 13%.
“This is one of those times where investor confidence is reinforced along with a recovery in fundamentals, thus making it a technical rebound and a fundamental recovery,” said Taye Shim, an analyst with Daewoo Securities. Despite the jump, Brent prices reached only September-October levels which are less than half their mid-2014 levels, when the global glut started.
“Markets will remain jittery as big events like the Italian constitutional referendum and the ECB meeting are yet to unfold this year, but for a very short term investor sentiment on risk assets is likely to improve.” Indonesian shares closed almost 1% higher, posting their third straight session of gains.
Mining-related trade services provider Sumber Energi Andalan Tbk surged 24.6%, followed by PT Jakarta Kyoei Steel Works Tbk, which jumped 21.9%. Indonesia’s annual inflation rate in November accelerated to 3.58%, the highest in seven months.
Singapore shares ended 0.8% firmer, hitting a four-month high, and posting their eighth straight session of gains, the longest winning streak since December 2014. Rig builders Keppel Corp climbed 8.1% and Sembcorp Industries soared 7%.
Philippine shares snapped two sessions of declines, ending 1.2% higher after rising as much as 2.4%. Petroleum refiner Petron Corp gained 5.9% while Metro Pacific Investments Corp rose 3.5%.
