Japanese markets gained close to 2 percent in the first trading session of 2017 after strong economic data fuelled gains in the U.S. on Tuesday.
Oil rebounded after falling from its highest level since July 2015 while gold dropped for the second time in seven sessions.
Manufacturing Growth
U.S. manufacturing expanded at the fastest pace in two years led by the biggest pickup in new orders since 2009.
The Purchasing Managers Index for December rose to 54.7, its fourth straight monthly advance, according to data from the Institute of Supply Management. The median forecast in a Bloomberg survey projected a reading of 53.8.
Orders for exports rose at its fastest pace since May 2014 while the addition of staff grew at the quickest rate since mid-2015.
The positive economic data helped the U.S. markets snap a three-day losing streak. The S&P 500 Index posted its biggest gains in four weeks while the Dow Jones Industrial Average gained over a 100 points to head closer towards the 20,000 mark. The NASDAQ Composite Index advanced 0.85 percent.
Also Read: Fed Tightening Eases Stimulus Pressure Globally: Raghuram Rajan
Dollar Rallies, Yen Slides
The U.S. dollar advanced 0.16 percent, after rising to its highest level since December 2002 on Tuesday. The yen fell for the third straight day while the Korean won slipped 0.3 percent.
Oil Rebounds On Stockpiles Forecast
Oil resumed its advance after posting its biggest single-day fall since December 14.
U.S. inventories are expected to have dropped by 2.25 million barrels last week, according to a Bloomberg survey. The official report from the Energy Information Administration is due Thursday.
OPEC (Organization of Petroleum Exporting Countries) and non-member producers have begun output cuts in-line with the November 30 deal in order to stabilise the oversupplied market. Kuwait has initiated an output cut of 130,000 barrels per day from January 1, while Oman has started cutting production by 45,000 barrels per day.
After a 2.6 percent fall on Tuesday, West Texas Intermediate crude traded 0.52 percent higher, above the $52.60 per barrel mark.
Steady Start?
The SGX Nifty Index rose 0.22 percent to 8,208 as of 7:00 a.m., indicating a steady start for Indian equities. Banking stocks led the benchmark indices higher on Tuesday, but the NSE Nifty 50 Index failed to close above the 8,200 mark.
Investors will keep an eye out on the Wockhardt Ltd. stock, after the pharmaceutical major received another warning letter from the U.S drug regulator.
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