Asian markets mixed amid caution on euro plan

HONG KONG—Asian markets were mixed in edgy trade on Wednesday after Wall Street and Europe rallied on hopes that eurozone leaders are close to a solution to the region’s debt crisis.

But early gains were pared as caution set in due to a lack of concrete evidence of a plan, while dealers also looked ahead to a key vote Thursday in Germany, where MPs will decide on expanding a rescue fund for debt-mired European countries.

Tokyo ended flat, edging up 5.70 points to 8,615.65 and Sydney was 0.87 percent, or 34.9 points, higher at 4,039.5.

Seoul ended 0.73 percent, or 12.62 points, lower at 1,723.09, a day after surging more than five percent, while Shanghai was 0.74 percent off in the afternoon.

And Hong Kong slipped 0.19 percent as profit-takers stepped in after the market soared 4.15 percent in the previous session.

There seemed no clear sign of a solution to the crisis, which has sent global markets spiraling downwards and raised fears of another crippling financial crisis.

Only France let slip signs of a new plan to resolve the issue, with Prime Minister Francois Fillon saying any announcement would be made after Germany’s parliament approves boosting the eurozone rescue fund Thursday.

European leaders’ dithering over the long-running sovereign debt saga has stoked concerns in markets that they lack the will or unity to avert economic disaster.

US and European markets finished in positive territory for a second day.

On Wall Street, the Dow closed up 1.3 percent, the broader S&P 500 rose 1.1 percent and the Nasdaq added 1.2 percent.

But in early trade on Wednesday in Europe dealers were not as keen to buy.

London’s FTSE 100 was down 0.68 percent, the CAC 40 in Paris fell 0.50 percent and Frankfurt’s DAX lost 0.65 percent.

“Fundamentally, nothing has changed and we are really none the wiser over what the next act will be in this long-running Greek tragedy,” said Khoon Goh, senior economist at ANZ Bank in Wellington.

“Headlines will still drive markets for some time,” he told Dow Jones Newswires.

German Chancellor Angela Merkel on Tuesday again gave her backing to Greece and pledged every assistance to Athens, which is seeking the latest tranche of bailout cash to help it avoid a devastating default.

“We want a strong Greece in the euro area… Germany is ready to give all the help required,” Merkel said after talks in Berlin with Greek Prime Minister George Papandreou.

And the Greek leader said he was determined to implement reforms “not only to overcome the present crisis, but to make Greece more competitive”.

Greece was making a “superhuman effort” to bring down its debt, he insisted.

Deputies in Athens approved a controversial property tax Tuesday in a bid to plug its budget hole and help unlock the latest tranche of bailout funds needed to prevent a default that could come as early as next month.

The next instalment of debt aid due under its May 2010 bailout from the European Union and the International Monetary Fund is in the balance until EU and IMF officials have reviewed the country’s finances to their satisfaction.

Chief auditors from the IMF, EU and the European Central Bank will return to Athens on Wednesday or Thursday, eurozone chief Jean-Claude Juncker told the European Parliament.

They broke off their review of Greece’s finances nearly a month ago, over reported concerns about reform implementation.

The next big event in the diary for the eurozone is Thursday’s vote in the Bundestag on expanding the European Financial Stability Facility (EFSF), a plan agreed in July as part of negotiations over a second bailout for Greece.

A failure to expand the fund, which has been put in place to help other struggling and indebted nations, could send markets tumbling again.

On foreign exchange markets the euro edged up to $1.3630 in European trade Wednesday from $1.3590 in New York late Tuesday.

The single currency was at 104.17 yen compared with 104.43 in New York. The dollar edged down to 76.45 yen from 76.84 yen.

New York’s main oil contract, West Texas Intermediate (WTI) for delivery in November, slipped 60 cents to $83.85 a barrel in the afternoon.

Brent North Sea crude for November delivery shed 47 cents to $106.67.

Gold was at $1,655.95 an ounce by 0900 GMT, up from the $1,653.85 it was at by 0800 GMT Tuesday.

In other markets:

— Singapore dipped 0.91 percent, or 24.74 points, to 2,701.17.

Jardine Cycle and Carriage was up 1.90 percent to 40.17 while Keppel Corp slumped 2.89 percent to 8.07.

— Taipei gained 0.80 percent, or 57.03 points, to 7,146.98.

Taiwan Semiconductor Manufacturing Co edged up 0.57 percent to Tw$70.3 while leading design house MediaTek was 1.83 percent higher at Tw$333.0

— Manila jumped 4.16 percent, or 154.90 points, to 3,876.12.

Traders were playing catch-up with regional markets after Tuesday’s gains in Asia, when Manila’s index was closed due to Typhoon Nesat.

SM Investments was up 14.4 percent at 515.00 pesos and Metropolitan Bank rose 3.1 percent to 61.95 pesos while Philippine Long Distance Telephone gained 3.8 percent to 2,180 pesos.

— Wellington edged up 0.16 percent, or 5.34 points, to 3,298.17.

Air New Zealand added 0.9 percent to NZ$1.09 but Telecom fell 1.9 percent to NZ$2.53 and Fletcher Building was down 0.3 percent at NZ$7.55.

— Jakarta gained 1.13 percent, or 39.24 points, to 3,513.17.

— Kuala Lumpur added 0.54 percent, or 7.35 points, to 1,371.55.

Malayan Banking rose 1.3 percent to 7.97 ringgit, Genting added 0.6 percent to 8.96 ringgit and Telekom Malaysia gained 0.3 percent to 4.00.

— Bangkok fell 1.59 percent, or 15.02 points, to 931.60.

— Mumbai slid 0.47 percent or 78.01 points to 16,446.02.

India’s third-largest steel producer JSW Steel fell 6.63 percent to a year low of 570 rupees over iron ore shortages. Tata Steel, the world’s seventh largest steel company, slid 2.66 percent to 427.45 rupees.