Asia stocks follow Wall Street higher as oil prices rise

Asian equities broadly followed Wall Street higher on hopes of US economic resilience, while oil futures climbed after Saudi Arabia announced production cuts in an attempt to shore up crude prices.

Japan’s benchmark Topix stock index rose 1.3 per cent, Australia’s S&P/ASX added 1.1 per cent and Hong Kong’s Hang Seng gained 0.7 per cent on Monday.

The gains for Asia-Pacific stocks came after a rally on Wall Street on Friday that saw the S&P 500 rise 1.5 per cent and the tech-focused Nasdaq Composite climb 1.1 per cent after US jobs data showed new hires increased more than expected in May.

In commodities markets, crude briefly spiked after Saudi Arabia said it would cut oil production by 1mn barrels a day in a bid to prop up prices. The kingdom’s energy minister said the cuts would initially be for July but could be extended.

Brent crude, the international benchmark, rose as much as 3.6 per cent before paring gains to be up about 1 per cent at $76.96 a barrel. West Texas Intermediate, the US marker, rose as much as 4.6 per cent before pulling back to be up 1.2 per cent at $72.57.

Chinese equities bucked the broader trend in markets, with the CSI 300 index of Shanghai- and Shenzhen-listed stocks down 0.3 per cent after closing 1.4 per cent higher on Friday.

The losses for China stocks came despite a positive economic reading from the Caixin services purchasing managers’ index, which signalled sharper growth for the country’s service sector in May.

Official media in China also called on investors to have faith in the country’s domestic stock market, with the state-run Economic Daily suggesting that “clear-headed understanding, staunch confidence, resoluteness and patience” were the “chief responsibilities of all market participants”.

Futures markets tipped US stocks to edge down at the open on Wall Street later in the day, with the S&P 500 set to shed 0.1 per cent. The FTSE 100 was expected to rise 0.1 per cent.