Asian stocks higher after upbeat US retail sales, oil price continues decline

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SEOUL, South Korea—Asian shares climbed Friday as investor sentiment was lifted by strong retail sales in the world’s largest economy. But the price of oil extended its fall below $60 per barrel, keeping buying appetite in check.

Keeping score

Tokyo’s benchmark Nikkei 225 rose 1.3 per cent to 17,474.90 and South Korea’s Kospi added 0.3 per cent to 1,923.11. Hong Kong’s Hang Seng gained 0.2 per cent to 23,363.15 and China’s Shanghai Composite climbed 0.5 per cent to 2,938.62. Stocks in Southeast Asia also rose but Australia’s S&P/ASX 200 fell 0.3 per cent to 5,216.00.

Analyst’s take

“Investors faced a mixed bag this morning. Overnight news of strong US retail sales adds to a consolidating picture of improving growth in the world’s largest economy,” said Ric Spooner, chief market analyst at CMC. “However, another slide in oil prices and caution ahead of monthly data on China’s economy is likely to keep investors cautious about the materials stocks and the energy sector in particular.”

US retail

U.S. retail sales perked up in November, as cheaper gas and an improving job market fueled a promising start to the holiday shopping season. Retail sales advanced 0.7 per cent last month, the highest in eight months. Excluding gas stations, whose sales were dented by falling gasoline prices, sales climbed 0.9 per cent.

Oil price

Benchmark U.S. crude fell 79 cents to $59.16 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 99 cents to settle at $59.95 a barrel on Thursday, its first time below $60 a barrel in more than five years. Brent crude, a benchmark for international oils, dropped 42 cents, to $63.26 on the ICE futures exchange in London. The lower energy costs have freed up money for consumers but stocks of energy companies have took a beating.

China data

A source of caution for investors on Friday is a raft of data that will be released from China later in the day, including its retail sales and industrial production. Stan Shamu, an analyst at IG, said activity in retail and industrial production could fall short of expectations after the soft inflation reading earlier this week.

Wall Street

U.S. stocks closed higher after strong U.S. retail sales, though energy stocks lost ground. The Dow Jones industrial average rose 0.4 per cent to 17,596.34. The Standard & Poor’s 500 rose 0.5 per cent to 2,035.33 and the tech-heavy Nasdaq composite rose 0.5 per cent to 4,708.16.

Currencies

The euro was steady at $1.2398 while the dollar fell to 118.89 yen from 118.92 yen.