HONG KONG -- The first agreement to cut crude oil production from the Organization of Petroleum Exporting Countries in eight years on Wednesday surprised Asian markets.
With participants largely expecting OPEC members to fail once again to come to an agreement due to conflicting interests, crude oil futures contracts in New York rose more than 5% from Wednesday. In the main Asian markets, shares across the board, especially oil-related, were bought up rapidly on Thursday, raising the region's stock indices.
In Tokyo on Thursday, Inpex and Japan Petroleum Exploration soared. Trading house Mitsubishi Corp. hit a high for the year. Helped by a pause in the yen's appreciation against the dollar, the Nikkei Stock Average briefly climbed nearly 1.8%.
Oil-related shares rose in the Hong Kong market as well. Chinese crude oil producer CNOOC shot up 6% from the previous day at one point on Thursday. China's top three state-run oil companies -- PetroChina, Sinopec and CNOOC -- rose not only in Hong Kong but also in Shanghai. In the Shanghai stock market, rig builder Offshore Oil Engineering also went up. The buying spree spilled over to coal shares, including China Shenhua Energy.
In the Singapore market, the stocks of rig constructors such as Sembcorp Marine and Keppel were bought up. The Malaysian market saw drilling service provider SapuraKencana Petroleum and UMW Oil and Gas, among others, rise.
The brisk purchase of oil-related large-cap stocks improved investor sentiment, bringing up main Asian stock indices such as South Korea's KOSPI, the Shanghai SE Composite Index and Hong Kong Hang Seng Index.
One exception was transportation stocks, which declined out of a fear that rising crude oil futures prices will lead to an increase in fuel costs. In the Tokyo market, Japan's major airlines ANA Holdings and Japan Airlines faced selling, while Cathay Pacific fell in Hong Kong and Air China limped in the Shanghai markets. In the Taiwan market, shipping issues such as Evergreen Marine lost ground.