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GLOBAL MARKETS-Resource stocks jump in Asia as oil extends rally

Published 2018-04-18, 11:35 p/m
© Reuters.  GLOBAL MARKETS-Resource stocks jump in Asia as oil extends rally
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* Oil highest in over 3 yrs on report Saudis wants higher prices

* Resource stocks star as most Asian markets move ahead

* Risk of inflationary pulse a drag for fixed-income bonds

* Dollar mostly range bound, GBP and CAD nurse losses

By Wayne Cole

SYDNEY, April 19 (Reuters) - Resource stocks were on a roll in Asia on Thursday as oil prices hit heights not seen since late 2014 and ignited a rally across commodities, though the potential boost to inflation globally also put some pressure on fixed-income assets.

Brent crude futures LCOc1 climbed another 29 cents to stand at $73.77 a barrel, adding to a 2.7 percent jump overnight. U.S. crude CLc1 gained 26 cents to $68.73.

The surge came on a Reuters report that OPEC's new price hawk Saudi Arabia would be happy for crude to rise to $80 or even $100, a sign Riyadh will seek no changes to a supply-cutting deal even though the agreement's original target is within sight. Saudis and their colleagues in OPEC need higher oil for their fiscal positions and the Kingdom is on a bold – and costly – reform program," said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader.

"So, they might continue to squeeze the lemon while they have the chance and the hand."

The leap in oil combined with fears that sanctions on Russia could hit supplies of other commodities to light a fire under the entire sector. Aluminium prices reached their highest since 2011, alumina touched an all-time peak and nickel jumped the most in 6-1/2 years. MET/L

Such increases, if sustained, could fuel inflationary pressures and investors hedged by selling sovereign bonds.

Yields on U.S. two-year Treasuries US2YT=RR stood at levels last visited in 2008 at 2.43 percent.

EXTRA ENERGY

Resource stocks were the big winners driving Australia's main index .AXJO up 0.6 percent. Japan's Nikkei .N225 gained 0.6 percent, led by a 2.9 percent rise in basic materials.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS added 0.8 percent, with energy up over 2 percent. E-Mini futures for the S&P 500 ESc1 rose 0.1 percent.

Wall Street had also seen hefty gains in the energy and industrial indexes, though that was offset by softness in sectors such as consumer staples and financials. .N

IBM 's IBM (NYSE:IBM).N 7.5 percent drop was the biggest drag on the S&P after the technology company's quarterly profit margins missed Wall Street targets. Dow .DJI ended down 0.16 percent, while the S&P 500 .SPX gained 0.08 percent and the Nasdaq .IXIC 0.19 percent.

In currency markets, the U.S. dollar remained range bound with its index a fraction firmer at 89.647 .DXY . It gained a touch on the yen to 107.40 yen JPY= , but stayed short of recent peaks at 107.78.

The euro hovered at $1.2384 EUR= , within striking distance of the week's top of $1.2413.

The Australian dollar AUD=D4 took a brief knock after jobs data proved unexpectedly soft in March, with employment rising by a meagre 4,900. nursed its losses at $1.4195 GBP= after a surprisingly tame reading on UK inflation led the market to reconsider the likely pace of future rate rises from the Bank of England. GBP/

Data out on New Zealand on Thursday showed annual inflation there had slowed to just 1.1 percent in the first quarter, underlining expectations that interest rates would remain at record lows for many more months to come. MSCI and Nikkei chart

http://reut.rs/2sSBRiD

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Sam Holmes & Shri Navaratnam)

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