By Willa Plank and Jenny W. Hsu

Surprise OPEC deal drives gains for energy-related stocks

Asian stock markets were broadly up early Thursday, with Japan's Nikkei on track for its highest close this year, after major oil-producing nations signed a deal to cut crude-oil output.

The Nikkei Stock Average gained 1.1% to 18,513.2 in the midday session. Elsewhere, Australia's S&P/ASX 200 was up 1%, Hong Kong's Hang Seng Index rose 0.5% and Singapore's Straits Times Index climbed 0.7%.

Despite much skepticism about the deal, the Organization of the Petroleum Exporting Countries late Wednesday agreed to cut production by 1.2 million barrels a day (, marking the group's first concerted effort to slash output since 2008. The move sent crude-oil prices up more than 9% overnight.

The OPEC cut represents about 1% of global production, which will help reduce an oil glut that has depressed prices for more than two years.

"People are going to be watching closely if the group can now actually live up to their pledges," said Stuart Ive, a client manager at OM Financial.

Read:The surprise OPEC deal that was 2 years in the making (

Energy-focused stock markets in Asia were among the best performers on Thursday, with Indonesia's Jakarta Composite Index rising 1% and the FTSE Bursa Malaysia Index adding 0.5%.

Among key energy stocks, Woodside Petroleum and Oil Search (WPL.AU) in Australia were up 6% and 9.8%, respectively. In Japan, shares of Japan Petroleum Exploration (1662.TO) surged 12.5% and Inpex (1605.TO) jumped 11.2%. In Hong Kong, offshore oil producer Cnooc (0883.HK) added 6.3%.

The surge in oil prices, along with solid U.S. economic data overnight, sent the U.S. dollar to its highest level against the yen since February in early Asian trade, supporting key export and manufacturing stocks in Japan.

The yield on U.S. 10-year Treasurys rose to 2.386% overnight from 2.297% on Wednesday, using 5 p.m. EST as the cutoff.

Read:November was the worst month for Treasurys since 2009 (

Rising Treasury yields have pulled money out of Asia in recent weeks, sinking regional currencies. But the impact on Asian currencies of higher oil prices, increased inflation expectations and rising Treasury yields was muted Thursday.

The Philippine peso and the Indonesian rupiah were down 0.07%. The Japanese yen and Korean won were up 0.2% and 0.4%, respectively.

Honda Motor (HMC) was up 2.8% and Toyota Motor (7203.TO) (7203.TO) added 1.8% while Mitsubishi Electric (MTU) rose 0.7%.

Strong manufacturing data out of China on Thursday helped drive the Shanghai Composite Index was up 0.4%, while the Shenzhen Composite Index rose 0.3%.

An official gauge of China's factory activity rose for a second straight month in November (, adding to recent signs of firmness in the world's second-largest economy, official data showed.

China's official manufacturing purchasing managers index rose to 51.7 from October's 51.2. The November reading beat a median forecast of 51.0 by economists polled by The Wall Street Journal. China's official nonmanufacturing PMI, also released Thursday, also rose to 54.7 in November from 54.0 in October (

"Both readings are much higher than our expectations. It's very likely that the economic growth rate could be faster in the fourth quarter," said Liu Xuezhi, an economist at Bank of Communications.

Still, sluggish external demand and Beijing's efforts to cut excess industrial capacity will likely continue to weigh on growth, Liu said. As such, a supportive fiscal policy is required to sustain growth momentum, while monetary policy makers will likely focus on curbing financial risks, he said.

(END) Dow Jones Newswires

December 01, 2016 02:04 ET (07:04 GMT)

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