Asian shares hits 1-year high, oil supported

Hong Kong’s Hang Seng added 0.2 percent to 22,963.51 and India’s Sensex gained 0.1 percent to 28,098.32. Malaysia’s KLSE Composite index was losing 0.3 percent while the Taiwan Weighted closed marginally higher.

Investors gave a mixed response to China’s approval of plans to link trading between the Shenzhen and Hong Kong stock exchanges, with Shanghai down by mid-morning but Hong Kong gaining ground. Japan’s Nikkei shed 1.6 percent as the yen strengthened to one-month high.

Analysts said the approval of the Shenzhen-Hong Kong Stock Connect was part of China’s efforts to open up its financial sector to make it more competitive by global standards.

The dollar picked up against the yen Wednesday after comments from a senior U.S. central banker suggested an interest rate hike could possibly come as early as next month.

In the currency market, the Japanese yen weakened against the US dollar in the afternoon session, trading at 100.95 as of late afternoon.

Preparations for the launch are expected to be finished in four months’ time but a start date is subject to regulatory approval, the Hong Kong exchange said.

Elsewhere, the dollar slumped against a basket of currencies, trading at 94.871, compared with levels above 95.00 during Asian hours on Tuesday.

“Dollar traders were not impressed”, said Kathy Lien, managing director for foreign exchange strategy at BK Asset Management.

“There’s growing realisation that the events in foreign economies have far more impact on US rates than previously accepted”, said Michael Matousek, head trader at US Global Investors Inc in San Antonio, citing a research note.

“At that meeting, the Fed revised up its view on the labour market and said risks to the economy diminished”.

In the commodities space, oil prices slipped again during Asian hours on Wednesday, after advancing almost 2 percent on Tuesday, supported likely by further OPEC news and a relatively weaker dollar. USA crude futures dropped 0.45 percent to $46.37, following a 1.8 percent advance on Tuesday. The U.S. equity benchmark index slipped 0.6 percent on Tuesday. In Japan, Inpex shares advanced 6.5%, while Japan Petroleum was up 4.3%.

China also reported that outbound foreign direct investment is up almost 62% in the first seven months of the year compared with the same period in 2015. Santos, Woodside Petroleum, Origin Energy and Oil Search gained 1-2 percent after oil prices settled up almost 2 percent overnight. London’s FTSE 100 declined 0.2 percent to 6,880.

BHP, which announced its earnings on Tuesday after the Australian market close, said it posted a record $6.4-billion USA annual loss due to a slump in commodities and a dam disaster in Brazil.

Australian biotechnology firm CSL reported net profit after tax of $1.24 billion for the full year ended June 30, slipping from $1.38 billion booked in the previous year.

The markets seemed satisfied by the company’s better-than-expected underlying profit, even though it recorded a record loss.

The US S&P 500, Dow and Nasdaq stock indexes all closed at all-time highs on Monday.