HONG KONG – Asian markets rose in early trade Wednesday, boosted by a Wall Street rally following a report that European leaders were close to massively increasing a rescue fund for troubled eurozone economies.
Robust earnings from chip giant Intel also provided some support but a downgrade of Spain’s credit rating tempered the mood.
Tokyo gained 0.55 percent by the break, Sydney added 0.68 percent and Seoul was 0.24 percent higher.
Hong Kong opened 1.79 percent higher and Shanghai was up 0.18 percent a day after traders sold out on news from Beijing that the Chinese economy had slowed further in the third quarter.
Markets took their lead from New York, where dealers welcomed a report in a British newspaper that France and Germany had agreed to more than quadruple the European Financial Stability Facility (EFSF) bailout fund.
Citing unnamed European Union diplomats, The Guardian said the eurozone’s two biggest economies would boost the rescue fund to two trillion euros ($2.7 trillion) from its current 440 billion euros.
If true the news would be a massive boost to markets as dealers have for months been concerned that a lack of strong leadership from Europe during its debt crisis could spark another global downturn.
The euro fetched $1.3773 in early Tokyo trade, slightly up from $1.3752 late Tuesday in New York, where the common currency was lifted by the Guardian report.
It was at 105.60 yen from from 105.66 while the dollar bought 76.69 yen from 76.81.
But analysts remained edgy. “What is apparent is that the lack of a single, unified voice from the EU has played a substantial part in the significant upward and downward shifts in financial markets,” said Tim Waterer, a senior currency dealer at CMC Markets in Sydney.
“As such, the choppy trading characteristics of markets in the past quarter may stick around for some time yet,” he told Dow Jones Newswires.
However, tempering the optimism was news that Moody’s had cut Spain’s debt rating by two notches from A1 from Aa2, with a negative outlook, warning that no “credible” resolution to the country’s economic crisis had yet emerged.
Moody’s is the last of the big three agencies to downgrade Madrid as the government struggles to control its debt troubles.
Wall Street provided a lead after Intel said it saw record sales for the September quarter, shrugging off worries about a softening PC market.
However, despite a record-high quarterly profit, Apple’s earnings were still below forecasts.
The Dow surged 1.58 percent, the tech-heavy Nasdaq rose 1.63 percent and the S&P 500 jumped 2.04 percent.
Oil was mixed, with New York’s main contract, light sweet crude for delivery in November, falling four cents to $88.30 per barrel.
Brent North Sea crude for December was up 13 cents to $111.28.
By 0255 GMT, gold was trading at $1,662.40 an ounce, up from $1,657.82 late Tuesday.