BHP BHP Group Limited

By Chao Deng

Shares in Australia are headed for their best week in over a month on Friday, as investors elsewhere in the region gradually adjust to the prospect of higher U.S. interest rates.

Australia's S&P/ASX 200 is on track to gain 4.1% this week, its best weekly percentage jump since the week ended Oct. 9. The resources sector led the index higher as heavy losses in oil prices eased this week. The benchmark, up 0.3% Friday, is also headed for its best close since Nov. 4.

South Korea's Kospi was flat on Friday, gained 1% week-to-date. The Shanghai Composite Index rose 0.5% on Friday, is also up 1.5% week-to-date.

   Hong Kong's Hang Seng Index   slipped 0.2% while Japan's Nikkei Stock Average  was up 0.1% Friday. 

A weaker yen buoyed Japan shares earlier this week, with the local currency touching its weakest level since late August. But the currency strengthened overnight, last up 0.1% at Yen122.82 per U.S. dollar, after the Bank of Japan's decision to keep its monetary policy unchanged Thursday.

The Nikkei is up 0.7% this week.

"The main reason [for the region's gains this week] is a more relaxed approach about the Fed" by investors, said Shane Oliver, investment strategist with AMP Capital. "Worries about the Fed causing an emerging market crisis are dissipating."

Viewing the Fed's move as a positive for the equity market marks a shift from weeks past, when the Federal Reserve's plans sparked worries about higher borrowing costs and slower growth, pushing shares lower.

Now, many investors--and even global central bankers--are eager for the Fed to act, if only to settle pending uncertainty.

Several also said they believe any increase in rates would be incremental, and that a December move would signal the Fed's vote of confidence in the global economy.

"We have done everything we can to avoid surprising the markets and governments when we move, to the extent that several emerging market and other central bankers have for some time been telling the Fed to 'just do it,'" said Fed Vice Chairman Stanley Fischer said in San Francisco Thursday.

In Australia, shares rebounded from heavy selling the previous week when commodities prices tumbled. Most sectors gained this week, although energy, telecommunications and utilities stocks rallied most, by 6.7%, 5.3% and 4.1%, respectively.

Shares of BHP Billiton Ltd. (BHP.AU)(BLT.LN) (BHP.AU) Australia's largest mining company, are up 1.4% this week after shedding 11% the previous week. Its shares had fallen to close to a decade low last Friday amid worries about the fallout from a recent dam-burst at its jointly owned Brazilian iron-ore mine operation that killed nine people.

Shares of BHP were up 0.4% on Friday.

"Investors are realizing that the associated selloff in other resources stocks probably went too far" given that BHP had unique reasons for its sell off, Mr. Oliver said.

U.S. stocks ended slightly off Thursday, dragged by health care and energy shares.

Brent oil prices are up 1.5% this week, and up 0.3% Friday at $44.35 a barrel, after falling roughly 8% the previous week.

U.S. oil futures slipped overnight to $40.54 a barrel, their lowest level since Aug. 26.

Gold prices are up 0.3% at $1,080.90 a troy ounce.

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(END) Dow Jones Newswires

November 20, 2015 01:03 ET (06:03 GMT)

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