Stock markets across Asia mostly finished higher Thursday on the back of gains in energy and mining shares, capping a volatile and eventful first half of the year.
Thursday’s rebound signaled that investors were brushing off worries about the fallout from Brexit. Japan’s Nikkei Stock Average NIK, +0.06% ended up 0.06%, Australia’s S&P/ASX 200 XJO, +1.77% gained 1.8%, and Korea’s Kospi SEU, +0.72% rose 0.7%. Hong Kong’s Hang Seng Index HSI, +1.75% closed up 1.8%, and China’s Shanghai Composite Index SHCOMP, -0.07% ended down 0.1%.
“The main reason behind [the gains] is that the market has more or less digested these Brexit shocks and a lot of pessimism has already been priced in last Friday and this Monday, so naturally we can see a technical or true rebound these few days,” said Margaret Yang, market analyst for CMC Markets in Singapore.
An overnight bounce in crude oil prices above the psychologically important level of $50 a barrel pushed oil stocks higher in the Asia-Pacific region. In Hong Kong, shares of Cnooc Ltd. 0883, +2.89% gained 2.5%, and PetroChina Co. Ltd. 0857, +2.12% added 2.1%.
Shares of mining companies also rose after the U.S. Dollar Index BUXX, -0.03% , which measures the U.S. currency against a basket of currencies, weakened overnight. A weaker dollar lifts commodities because they are priced in the U.S. currency, effectively making them cheaper to buy for those holding other currencies. This leads to expectations that buyers will purchase more of the commodities, and to investors pushing share prices higher. Australia’s BHP BillitonBHP, +1.91% gained 1.9%, while Japan’s Topix mining index was up 1.6%.
The U.S. dollar’s relative weakness sent the price of commodities including gold, silver, copper and iron ore higher overnight, said Angus Nicholson, market analyst for IG, an Australian brokerage firm. That in turn helped materials shares in Australia on Thursday, he added.
The month of June began with investors worried about a strengthening yenUSDJPY, +0.01% , which prompted multiple warnings by Japanese officials that they could intervene in markets. Then global index provider MSCI held off from adding mainland Chinese-listed stocks to its Emerging Markets Index. By the end of the month, concerns about the U.K.’s vote to leave the EU spilled over into Asian markets, roiling stocks to bonds and currencies.
For the month of June, Japan’s Nikkei was the region’s worst-performing stock benchmark, down 9.6% for the month. In China, the Shanghai Composite booked a tiny gain of 0.45% for the month, a sign of its relative isolation from investors’ worries about the preceding week’s Brexit vote.
In Southeast Asia, however, smaller stock markets generally did well over the month, with the Philippine Stock Exchange’s PSEi index PSE, +1.93% posting a 5.3% gain for the month, which ended with the swearing in of Rodrigo Duterte as the nation’s president.