Asian stocks gained early on Monday, relieved after seeing Wall Street rally overnight on the back of a sharp rise in crude oil prices.
MSCI’s broadest index of Asia-Pacific shares outside Japan nudged up 0.2 percent, putting further distance between a four-year low plumbed last week. Australian shares were up 1 percent.
The S&P 500 rose 2 percent and the Dow added 1.3 percent Friday as a cold snap in North America and Europe caused a rally in oil prices. The S&P energy sector surged 4.3 percent.
Global equities were also boosted last week as the European Central Bank signalled additional monetary easing steps to come, and focus fell on the Federal Reserve and Bank of Japan meetings this week.
From the Fed, investors will look for any hints of when a second interest rate hike would come, while speculation mounted last week towards the BOJ implementing additional easing measures.
“The calendar this week is busy, with the Federal Open Market Committee and BOJ meetings the main highlights. We expect no action from the Fed or BOJ, although investors will be looking for a more dovish forward bias as the renewed decline in oil prices lowers inflation expectations globally,” wrote strategists at Barclays.
Risk aversion amid fears of a China-led global slowdown and oil prices sinking to 13-year lows had rocked global markets at the start of the year, and the lull in flight-to-quality seen towards the end of last week weighed on safe havens like U.S. Treasuries and the Japanese yen.
The dollar was steady at 118.75 yen after surging 0.9 percent on Friday, when it touched a two-week high of 118.88. The euro was steady at $1.0792 after losing 0.8 percent on Friday.
The Australian dollar, sensitive to the ebb and flow in risk appetite and fluctuations in commodity prices, traded at $0.7007 after touching a nine-day high of $0.7046 on Friday.
Crude, recently under pressure from a global glut, jumped percent as harsh winter weather boosted demand for heating oil. U.S. crude climbed 9 percent and Brent bounced 10 percent on Friday.
U.S. crude was last down 0.2 percent at $32.13 a barrel. The contracts had descended to as low as $26.19 last week, their lowest since May 2003.