Asian shares mixed after Slovakia eurozone vote
HONG KONG—Asian shares were mixed Wednesday with some markets reversing morning losses as fears eased over a Slovakia vote that blocked expansion of a key eurozone bailout fund.
Sydney lost 0.55 percent, or 23.3 points, to 4,204.3 and Tokyo closed 0.40 percent, or 34.78 points, lower at 8,738.90 but Seoul ended 0.81 percent, or 14.48 points, up at 1,809.50.
Also reversing a morning dip into negative territory, Hong Kong ended 1.04 percent higher, or 187.87 points, at 18,329.46.
Shanghai closed up 3.04 percent, or 71.48 points, to 2,420.00 after it had earlier hit a more than 30-month low.
Disappointing earnings from US aluminium giant Alcoa added to the nervous mood as it raised concerns over the upcoming reporting season.
“Markets will trade with a cautious tone keeping one eye on earnings and the other on developments in the eurozone,” said Mitul Kotecha, strategist at Credit Agricole.
“As we have noted, expectations of some concrete action by officials to help resolve the crisis in the eurozone by the end of the month are a key driving force for markets,” he told Dow Jones Newswires.
“But past history suggests that the risk of disappointment is high.”
Shares had seen strong gains over the past few sessions on hopes the eurozone debt crisis could be resolved, a feeling reinforced by a weekend announcement by France and Germany that they would shore up the region’s banks.
The recent rises brought some relief after global markets had slumped on fears that Greece’s debt troubles could lead it to default, which would in turn spread to other economies and banks.
Nerves set in again Wednesday after Slovakia’s parliament blocked a plan to expand the European Financial Stability Facility (EFSF), dealing a further blow to the bloc’s leaders as they look for a solution to the crisis.
It effectively stops the expansion of the 440-billion-euro ($600 billion) bailout fund, despite warnings from European Central Bank chief Jean-Claude Trichet that the world financial system faces systemic dangers.
Slovakia was the last of the 17 eurozone members to approve the revamp.
The vote also toppled the government of Prime Minister Iveta Radicova, who failed to secure backing from the junior coalition Freedom and Solidarity party after she turned the measure into a confidence motion.
However, the losses were mostly short-lived and Sumino Kamei, senior analyst at the Bank of Tokyo-Mitsubishi UFJ, said: “The rejection was in line with expectations and the consensus is that the plan is likely to be approved in a second vote.”
Resource firms in Australia dipped after Alcoa said Tuesday that third-quarter net profit tripled from a year earlier, but almost halved from the previous quarter as metal prices fell and the European economy stumbled.
BHP Billiton finished down 0.83 percent, Rio Tinto eased 0.79 percent and Woodside Petroleum was 0.65 percent weaker.
European shares rose in early trading, with London’s FTSE 100 climbing 0.52 percent to 5,423.96, while Frankfurt’s DAX 30 index rallied 1.68 percent to 5,963.83 points and the Paris CAC 40 jumped 1.44 percent to 3,198.88 points.
The euro hit a three-week dollar high, surging to $1.3816, the highest level since mid-September and compared with $1.3660 in New York on Tuesday. The dollar fell to 76.47 yen from 76.66 yen.
New York’s main contract, light sweet crude for delivery in November, was up 45 cents to $86.32 a barrel, while Brent North Sea crude for November delivery was up 73 cents to $111.82.
By 1100 GMT gold was at $1,682.01 an ounce, from $1,660.55 at 1100 GMT on Tuesday.
In other markets:
— Singapore’s Straits Times Index closed up 1.66 percent to 2,737.75 points.
DBS Group Holdings advanced 2.41 percent to Sg$12.33 and United Overseas Bank rose 1.73 percent to Sg$17.64.
— Kuala Lumpur shares rose 1.19 percent, or 16.85 points, to end at 1,428.50.
CIMB Group Holdings rose 0.7 percent to 7.30 ringgit while Gamuda added 2.7 percent to 3.06. Kuala Lumpur Kepong fell 0.1 percent to 20.58 ringgit.
— Bangkok edged up 0.84 percent, or 7.97 points, to 952.77.
Siam Cement gained 6 baht to 293, while Banpu added 4 baht to 572.
— Indian shares rose 2.55 percent, or 421.92 points, to 16,958.39.
Tech giant Infosys shares jumped 6.83 percent to 2,680.5 rupees while rival TCS closed up 3.66 percent to 1,066.3.
— Indonesian shares rose 104.18 points, or 2.95 percent, to 3,635.93.
Bank Mandiri rose 3.1 percent to Rp 6,650, Bank Rakyat jumped 3.2 percent to Rp 6,450 and coal producer Bumi Resources increased 8.6 percent to Rp 2,150.
— Taiwan’s weighted index fell 16.36 points, or 0.22 percent, to 7,382.35.
Hon Hai was 0.41 percent lower at Tw$72.9 while Taiwan Semiconductor Manufacturing Co rose 0.57 percent to Tw$70.4.
— Manila closed 0.25 percent, or 10.44 points, higher at 4,119.71.
Metro Pacific Corp. was up 5.42 percent at 3.11 pesos while SM Investments Corp. gained 0.1 percent to 510.50 pesos. Philippine Long Distance Telephone Co. bucked the trend, falling 1.9 percent to 2,168 pesos.
— Wellington fell 2.09 percent, or 71.03 points, to 3,325.12.
Fletcher Building fell 12.4 percent to NZ$6.92.
