Asian markets higher; Middle East tensions support crude prices

Top equity indexes in Asia ended in green territory on Tuesday following a strong lead from Wall Street and as oil prices rose to their highest level since 2005 on the back of political concerns.

Australia ASX +60.20 +1.00% 6,087.40 CLOSED

Shanghai Comp +25.40 +0.75% 3,413.57 CLOSED

Hang Seng Index +374.74 +1.31% 28,971.54 OPEN

Nikkei 225 +389.25 +1.73% 22,937.6 CLOSED

TSEC 50 Index +54.15 +0.50% 10,840.34 CLOSED

Tensions in the Middle East, especially after Saudi Gulf Affairs Minister Thamer al-Sabhan said during an interview the government of Lebanon "would be dealt with as a government declaring war on Saudi Arabia."

Also, the anti-corruption crackdown conducted by Saudi Crown Prince Mohammed bin Salman as a way to consolidate his power before taking over the throne it is weighing on sentiment and helping crude benchmarks to rise at a very convenient time.

Contributing to political instability was President Donald Trump, who is now visiting Asia. In a press conference with his Japanese counterpart Prime Minister Shinzo Abe, Trump signaled the era of strategic patience with North Korea was over, calling for tougher measures.

Earlier in the session, the Reserve Bank of Australia announced on Tuesday it would keep interest rates unchanged. RBA Governor Philip Lowe said inflation remains at low levels, but also expressed confidence that it will "pick up gradually as the economy strengthened."

On the corporate front, Samsung has lost an appeal over a patent lawsuit in the US Supreme Court. The California-based technology giant was awarded with $120 million.

The data front on Monday included the release of Germany factory orders for September, which rose by 1.0 percent despite expectations for a 1.5 percent decline.

Also, Germany’s services PMI for October stood at 54.7, below an estimated 55.2 reading, while Eurozone’s services PMI outperformed expectations at 55.0.

Ahead in the day, attention will be directed to German industrial production at 07:00 GMT, UK’s halifax house price index at 08:30 GMT and EU’s retail sales at 10:00 GMT.

But the main events of the day will be speeches from ECB President Mario Draghi at 09:00 GMT and Fed Chair Janet Yellen at 19:30 GMT.

Fort Financial Services