Asian shares mostly up after German court verdict

HONG KONG—Asian markets were mostly higher Thursday as news that a German court had dismissed an attempt to block the country’s payments to eurozone bailouts was tempered by profit-taking.

Early gains were pared as dealers digested weak economic data, while they also had an eye on an upcoming speech by US President Barack Obama on job creation.

Tokyo closed up 0.34 percent, or 29.71 points, to 8,793.12, Seoul added 0.72 percent, or 13.18 points, to 1,846.64 while Sydney was 0.11 percent, or 4.6 points, higher at 4,188.0.

However, Hong Kong slipped 0.67 percent, or 135.18 points, to 19,912.82 and Shanghai fell 0.68 percent, or 17.15 points, to 2,498.94.

Germany’s Constitutional Court ruled that Berlin was not breaking the law by joining a eurozone bailout mechanism, removing an obstacle to rescues of Greece and other countries.

The country’s top court averted a new eurozone crisis by upholding bailouts for debt-wracked nations but insisted parliament has a bigger say in future.

The ruling, nervously anticipated on volatile financial markets, paved the way for Germany – the European Union’s biggest benefactor – to continue its multibillion-dollar contributions to bailouts.

“The move might suggest that Germany may participate more actively in peripheral bailouts,” said St. George Economics in a report to clients, according to Dow Jones Newswires.

Adding to buying sentiment was the US Federal Reserve Beige Book report that provided an improved assessment of the world’s number one economy, despite a number of weak indicators, including in manufacturing and jobs.

Asian markets were also given a lift by a powerful performance on Wall Street, which bounced back strongly from several days of heavy selling.

The Dow jumped 2.47 percent, the S&P 500 surged 2.86 percent and the tech-heavy Nasdaq Composite rallied 3.04 percent.

However, in Sydney the morning’s gains were cut back as dealers digested data showing unemployment rose for a second straight month in August, to 5.3 percent from 5.1 percent in July.

And in Tokyo traders were looking over figures showing Japan’s current account surplus shrank 42.4 percent from a year earlier in July, the fifth consecutive decline in the wake of the March 11 earthquake and tsunami.

Other data showed a decline in machinery orders in July, an indication that corporate capital spending was being deterred as a strong yen makes firms less profitable.

The dollar rose to 77.38 yen in Asian trade from 77.26 yen in New York late Wednesday.

The euro fell to $1.4070 from $1.4096, but was well up from the $1.3972 it hit on Tuesday, its lowest level since mid-July. The European single unit inched down to 108.87 yen from 108.90 yen.

The Swiss franc was mixed following the Swiss central bank’s move earlier this week to cap the currency. The euro traded at 1.2090 Swiss francs, down from 1.2095 in New York. The dollar rose to 0.8594 Swiss francs from 0.8579.

Meanwhile, global attention is on what plans Obama will unveil to tackle US unemployment after figures last week showed no jobs were created last month, stoking fears over the world’s biggest economy.

And in China, officials are due to release key inflation figures after July saw prices rise at their fastest pace in three years. Another high inflation rate could lead to further monetary tightening by Beijing, which would depress already weak stocks.

Oil was mixed. New York’s main contract, light sweet crude for October delivery, added 41 cents to $89.75 per barrel.

However, Brent North Sea crude for delivery in October fell 10 cents to $115.70.

Gold was trading at $1,835.70 an ounce at 0800 GMT, down from $1,845.60 on Wednesday.

In other markets:

— Manila closed 0.96 percent, or 41.52 points, higher at 4,356.73.

Lepanto Consolidated Mining gained 5.26 percent to 1.40 pesos while SM Prime Holdings rose 3.86 percent to 12.36 pesos.

— Wellington closed 0.18 percent, or 7.10 points, higher at 3,308.05.

Fletcher Building gained 0.5 percent to NZ$7.73 and Auckland Airport added 1.1 percent to NZ$22.95 but Telecom shed 0.2 percent to NZ$2.48.

— Taipei rose 0.26 percent, or 19.36 points, to 7,548.37.

TSMC rose 0.15 percent to Tw$68.7 while Hon Hai fell 2.74 percent to Tw$71.1.

— Kuala Lumpur was up 0.36 percent, or 5.22 points, to close at 1,469.83.

Plantation firm IOI Corp. gained 3 percent to 4.81 ringgit, Genting added 0.9 percent to 9.84 and Axiata Group rose 0.6 percent to 4.77.

MISC lost 0.6 percent to 7.11 ringgit and YTL Corp. eased 0.7 percent to 1.42.

— Bangkok edged up 0.33 percent, or 3.49 points, to 1,072.21.

Banpu gained 8 baht to 644, while Siam Cement lost 1 baht to 325.

— Singapore closed up 0.87 percent, or 24.77 points, to 2,856.90.

Jardine Cycle and Carriage gained 2.04 percent to 47.00 and Keppel Land added 2.02 percent to 3.03.

— Jakarta rose 0.10 percent, or 3.96 points, to 4,005.39.

Cigarette maker Garam rose 1.1 percent to Rp 59,350 and Bank Rakyat jumped 1.5 percent to Rp 6,950, while car maker Astra fell 0.4 percent to Rp 71,000.

— Mumbai rose 0.59 percent, or 100.54 points, to 17,165.54.

Energy giant Reliance Industries added 2.62 percent or 21.8 rupees to 853.5 while the third-largest software exporter Wipro rose 2.58 percent or 8.5 rupees to 338.

Originally posted at 011:11 am | Thursday, September 08, 2011