Crude oil joins commodity rally as OPEC cuts output

India Infoline News Service | Mumbai | December 01, 2016 08:44 IST

Asian markets opened in the green with the Japanese 'Nikkei" leading from the front

Daily Market Strategy
Asian markets opened in the green with the Japanese 'Nikkei" leading from the front as US/Yen hit 114.5 the highest in the last 10 months. This saw Japanese exporters lead gains along with commodity stocks from other Asian indices. The Dow Jones hit new intra session highs but gave up gains on profit booking near the close.

The landmark decision by the Organization of the Petroleum Exporting Countries (OPEC) to cut production has fueled a sharp rally in oil prices, which rose almost 10% to skyrocket near the $ 50 a barrel mark. OPEC’s collective output will now reduce by 1.2 million barrels a day. The last time a cut was implemented was way back in January 2009 and non-OPEC members like Russia have also joined in the output reduction.

At the macro level, the second quarter of this fiscal year saw GDP growth at 7.3% (yoy), higher than the reading of 7.1% during the prior quarter. Lower interest rates are yet to translate into any meaningful shift in the private investment cycle. Meanwhile, India's infrastructure output accelerated to its fastest growth in half a year rising 6.6pc yoy in October. Later in the day, data is awaited on auto sales numbers, India manufacturing PMI, EU unemployment, US jobless claims and manufacturing PMI.



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