Asian shares held near a 20-month top on Monday even as investors took some money off the table following a strong run recently, while oil jumped to more than a one-week high after two large crude production bases in Libya began shutting down.

Turnover in Asian shares was light with US stock and bond markets closed for the Martin Luther King Jr holiday.

MSCI’s broadest index of Asia-Pacific shares outside Japan gave up early gains to be flat, after earlier notching up its highest since June 2018. Japan’s Nikkei added 0.2% to be near its highest in 15 months. Chinese shares stayed strong with the blue-chip CSI300 index rising 0. per cent. Australia’s main index scored another all-time peak and South Korea was near its best level since October 2018.

Eyes will be on US corporate earnings with Netflix, Intel Corp and Texas Instruments Inc set to report this week, while central banks in the European Union, Canada and Japan hold policy meetings.

Sentiment was supported by the relentless run of record highs on Wall Street. Only three weeks into the new year, the S&P 500 has gained just over 3 per cent and the NASDAQ almost 5 per cent.

Ray Attrill, head of foreign exchange strategy at National Australia Bank, suspects the strength on Wall Street owes much to the Federal Reserve’s decision in September to rein in rising repo rates by flooding markets with cash.

“The relationship between the size of the Fed’s balance sheet, now some 11 per cent bigger than where it was in late September, and the performance of US risk assets is uncanny,” he said, noting the balance sheet had just hit a three-month top of $4.18 trillion.

Reuters