Asia markets boosted by Wall St surge, Iran fears lift oil

Donald Trump has said he will decide by May 12 on whether or not to dump the Iran nuclear deal. (Photo: AFP/Yuri Gripas)

All three main indexes in New York clocked up sizeable gains Friday after the closely watched non-farm payrolls report showed unemployment at an 18-year low - but fewer-than-expected jobs were created in April and average earnings missed estimates.

The figures soothed anxieties that the Federal Reserve could lift borrowing costs four times this year owing to a pick-up in inflation and a strengthening economy. Those worries have acted as a weight on global markets in recent weeks.

Hong Kong was 0.2 per cent higher and Shanghai surged 1.5 per cent, while Sydney was 0.4 per cent up. Wellington, Taipei, Jakarta and Manila were well up.

But Tokyo ended marginally lower as traders returned following an extended holiday weekend, while Singapore was 0.4 per cent off.

Seoul was closed for a public holiday.

However, there are worries that markets may have plateaued, with strong earnings unable to help push gains further.

"The big surprise from this stellar earnings season is that the market hasn't broken higher," said Greg McKenna, chief market strategist at AxiTrader.

"Certainly, the earnings have been there but it seems the narrative was molded by the comments of the Caterpillar (chief financial officer) who said Q1 was likely the high-water mark.

"That he said that is not remarkable. That it resonated with the market is the important point."

ENERGY FIRMS RALLY

Investors remain on edge on concerns about the China-US trade spat after high-level talks in Beijing last week ended with no agreement between the two sides.

"Whatever optimism investors had about China-US trade negotiations should be undermined by the fact there was no communique, with rumours suggesting the two superpowers are sitting worlds apart after the US failed to win any concessions," said Stephen Innes, head of Asia-Pacific trade at OANDA.

Traders are also nervously awaiting Trump's decision on whether or not to continue with the Iran nuclear deal, which he has in the past derided.

The president has said he will decide by May 12, with many fearing he will pull out of the 2015 deal and spark fresh turmoil in the already tinderbox Middle East.

Speculation he will dump the agreement has fired oil prices to four-year highs, with both main contracts above US$70 and forecast to go even higher.

Iranian President Hassan Rouhani warned that if Trump quits the deal then Washington will regret it "like never before".

The rise in oil has, however, boosted energy firms in Asia with CNOOC, PetroChina and Sinopec surging in Hong Kong, while Sydney-listed Woodside Petroleum and Tokyo-listed Inpex were also sharply higher.

In early European trade Paris fell 0.1 per cent and Frankfurt was up 0.1 per cent.

- Key figures around 0810 GMT -

Tokyo - Nikkei 225: FLAT at 22,467.16 (close)

Hong Kong - Hang Seng: UP 0.2 per cent at 29,994.26 (close)

Shanghai - Composite: UP 1.5 per cent at 3,136.64 (close)

London - FTSE 100: Closed for a public holiday

Euro/dollar: DOWN at US$1.1926 from US$1.1957 at 2100 GMT on Friday

Pound/dollar: DOWN at US$1.3531 from US$1.3534

Dollar/yen: UP at ¥109.32 from ¥109.08

Oil - West Texas Intermediate: UP 66 cents at US$70.38 per barrel

Oil - Brent North Sea: UP 65 cents at US$74.52 per barrel

New York - Dow: UP 1.4 per cent at 24,262.51 (close)