Asian stocks inch higher on Europe optimism
By Alex KennedyAssociated Press
A man waits to cross a road as others watch a digital display of global stock indexes outside a securities firm in Tokyo Monday, July 2, 2012. Asian stock markets inched higher Monday amid continued optimism over Europe's moves to ease its debt crisis and economic malaise. (AP Photo/Koji Sasahara)
SINGAPORE — Asian stock markets inched higher Monday amid continued optimism over Europe’s moves to ease its debt crisis and economic malaise.
Japan’s Nikkei 225 index rose 0.4 percent to 9,037.95 and South Korea’s Kospi gained 0.2 percent to 1,857.08. Australia’s S&P/ASX 200 index added 0.9 percent to 4,132. China’s Shanghai Composite index increased 0.2 percent to 2,228.89.
Markets in Hong Kong were closed Monday to commemorate the hand-over of the territory to China in 1997.
Leaders of the 27 European Union countries said after a meeting Friday that they would seek to centralize regulation of European banks and, if necessary, bail them out directly, instead of funneling loans through governments that already have too much debt.
The EU said it also plans to ease borrowing costs for Italy and Spain, the third- and fourth-largest of the 17 economies that use the euro. It would also stop mandating painful budget cuts for every country in need of emergency financial aid and tie the region’s budgets, currency and governments more tightly.
Investors will be closely watching as EU finance ministers hash out the details of these plans over the next two weeks.
Some analysts expect the European Central Bank and the Bank of England to cut lending rates this week in a bid to spur economic growth.
“We look this week for renewed easing by the ECB and BoE in an environment of very soft business confidence,” Barclays said in a report. “The primary factor behind weak global confidence is weakness in EU demand.”
Signs that the Chinese economy, the world’s second-largest, continues to slow kept Asian markets in check. Chinese industrial production fell to a seven-month low in June, according to HSBC’s purchasing managers index survey.
“Growth is likely to be on track for further slowdown,” said HSBC economist Hongbin Qu. “We expect more decisive monetary easing efforts to come through in the coming months.”
Trading volume in the U.S. will likely be light this week amid the Independence Day holiday on Wednesday.
Global stock and commodity markets soared Friday amid EU optimism. The Dow Jones industrial average closed up 2.2 percent at 12,880.09. The Standard & Poor’s 500 index rose 2.5 percent to 1,362.16. The Nasdaq composite average jumped 3 percent to 2,935.05.
Benchmark oil for August delivery was down $1.15 to $83.81 a barrel in electronic trading on the New York Mercantile Exchange. The contract surged $7.27 to close at $84.96 in New York on Friday.
In currencies, the euro fell to $1.2626 from $1.2646 Friday in New York. The dollar fell to 79.58 yen from 79.82 yen.
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Tags: Asian Stock Market , Business , economy , Euro zone debt crisis , Europe , News
