Asia shares rally with oil, wary of China trade data

By Wayne Cole

SYDNEY (Reuters) - Asian share markets rallied on Wednesday as a revival in risk appetite knocked back the yen and oil ran into only modest profit-taking after reaching a major chart milestone that augured well for further gains ahead.

Whether sentiment hangs together could depend on China trade data due later in the session . Forecasts favour some improvement in exports and imports in March after a dire February, which would likely underpin commodities.

Japan's Nikkei <.N225> led the bounce with a rise of 1.6 percent to reach its highest in eight sessions. MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> added 0.5 percent and Australia <.AXJO> gained 0.9 percent.

 

After a barnstorming performance on Tuesday, oil pulled back a little as concern over a larger-than-expected build in U.S. crude stocks offset reports that Russia and Saudi Arabia may have reached consensus on an oil output cap. [O/R]

Brent crude was down 38 cents at $44.32 barrel, while U.S. crude eased 43 cents to $41.74.

Yet prices had hit four-month highs overnight and made a key technical breakthrough that could signal a further rally.

Analysts at Citi noted U.S. crude finished above its 200-day moving average since its long downtrend first started in 2014. "It suggests that the low is in and higher levels should continue to be seen in 2016," wrote Citi.

A rally in energy stocks helped the Dow <.DJI> end Tuesday 0.94 percent firmer, while the S&P 500 <.SPX> gained 0.97 percent and the Nasdaq <.IXIC> 0.8 percent. The S&P 500 energy sector <.SPNY> jumped 2.8 percent.

All 10 S&P sectors closed higher and the Dow industrials posted their best day in about a month.

The lift in energy boosted the oil-sensitive Canadian dollar to near a nine-month peak while nudging the safe-haven yen back from its recent peaks.

Canada's loonie stood at C$1.2769 per USD >, not far from the overnight top of C$1.2750 - a level last seen in July.

The greenback was back above 108.50 yen >, having climbed from a near 18-month trough around 107.63 set on Monday. The euro rose to 123.60 yen >, putting further distance from a three-year low of 122.085 set last month.

Against the dollar, the euro eased to $1.1384 > after turning around from a six-month peak of $1.1465. That helped the dollar index <.DXY> climb back above 94.000, from a near eight-month low of 93.627.

In commodity markets, copper and iron ore sat on large gains while gold > held firm at $1,255.66 an ounce, having climbed to a three-week high of $1,262.60 on Tuesday.

(Reporting by Wayne Cole; Editing by Eric Meijer)