Reuters
Equity markets across Asia-Pacific extended their gains Thursday, buoyed by overnight strength in the U.S. and fresh 3½-year highs for oil.
In Malaysia, markets remained closed after the ruling coalition suffered a surprise loss in Wednesday’s election, a result whose shock value compares with that of Brexit and the 2016 U.S. presidential election.
The iShares Malaysia ETF slumped 6% in New York on Wednesday, its biggest drop since S&P’s downgrade of the U.S. in August 2011 shook markets world-wide. The market closure Thursday and Friday was expected to prevent some knee-jerk selling.
“The extended holiday would likely see any immediate impact on the benchmark index being smoothened,” said Jingyi Pan, a market strategist at IG Group.
Many market participants said the opposition, led by 92-year-old former prime minister Mahathir Mohamad, could enact policies — such as increased spending and an end to the goods-and-services tax — with far-reaching consequences for Malaysia’s economy.
For Capital Economics, the change opens up the possibility that Malaysia will finally start to tackle some of its institutional problems. That includes the scandal surrounding state investment fund 1MDB.
The stock benchmark in neighboring Singapore was the only one in the region lower by midday, though just by 0.1%.
Gains in the region, though, were generally modest — less than 0.3%. But Hong Kong’s Hang Seng Index continued to rebound, ending morning trading up 0.9%, helped by gains of at least 2.5% in China’s oil majors, which are listed in the city.
New Zealand’s main stock index , after a record close Wednesday, surpassed its intraday record Thursday, and Australia’s benchmark neared a 10-year intraday high in morning trading, helped by energy stocks.
Oil futures were up roughly 0.7% in Asia after projectiles were fired from Syria into the Israel-controlled Golan Heights and missiles fired by Yemen-based Houthi rebels went toward the Saudi capital of Riyadh.