Asian shares rise on Wall St lead, Europe hopes

HONG KONG—Asian markets mostly rose 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 0.35 percent, or 30.63 points, to close at 8,772.54, while Sydney finished up 0.64 percent, or 26.8 points, at 4,213.70.

Hong Kong ended 1.29 percent, or 232.76 points, higher at 18,309.22 and Seoul was up 0.93 percent, or 17.02 points, at 1,855.92.

However, Shanghai suffered another sell-off and closed down 0.25 percent, or 5.98 points, at 2,377.51.

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 correct, 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 economic downturn.

But doubts emerged amid conflicting reports that European officials were still debating the size of the EFSF.

“The Guardian headline, that the package would be two trillion euros generated a risk rally, but soon markets realised that this was not new news, was denied, and the gains were eased,” noted Emma Lawson of National Australia Bank.

“Expectations for something positive from the weekend EU summit come against the backdrop of continued uncertainty over Greece,” said Osao Iizuka, head of FX trading at Sumitomo Trust & Banking.

Investors are cautiously awaiting a summit of EU leaders in Brussels on Sunday that many hope will provide a blueprint for a solution to the debt crisis, which has ravaged the European bloc.

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, warning that no “credible” resolution to the country’s economic crisis had yet emerged.

Moody’s is the last of the big three ratings 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 third 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.

European stock markets rose in early trade Wednesday with London’s FTSE 100 index of leading shares up 0.97 percent at 5,462.58 points and Frankfurt’s DAX 30 gained 0.55 percent to 5,909.58 points. In Paris, the CAC 40 added 0.80 percent to 3,166.24.

The euro fetched $1.3844, up from $1.3796 in early European trade. The single currency fetched 106.30 yen, up from 105.95 yen, while the dollar was flat at 76.80 yen.

Oil prices were mixed, with New York’s main contract, light sweet crude for delivery in November, gaining 50 cents to $88.87 per barrel.

Brent North Sea crude for December fell 51 cents to $110.77.

By 1100 GMT, gold was trading at $1,651.29 an ounce, up from $1,648.99 earlier Wednesday.

In other markets:

— Taipei was flat, edging down 6.11 points to 7,353.37.

HTC fell 2.83 percent to Tw$687.0 while China Steel rose 0.34 percent to Tw$29.5.

— Manila closed 0.87 percent, or 36.29 points, higher at 4,193.55.

Top-traded Alliance Global rose 2.43 percent to 10.12 pesos, while Philippine Long Distance Telephone added 0.45 percent to 2,214 pesos.

Lepanto Consolidated Mining fell 0.76 percent to 1.30 pesos.

— Kuala Lumpur shares rose 0.72 percent, or 10.31 points, to end at 1,450.25.

Budget carrier Air Asia gained 4.47 percent to 3.74 ringgit, while UOA Development added 6.34 percent to 1.51. OSK Holdings lost 1.12 percent to 1.77 ringgit.

— Singapore’s Straits Times Index closed down 0.16 percent to 2,720.21 points.

Singapore Airlines advanced 0.09 percent to Sg$11.07 and DBS Group Holdings gained 0.75 percent to Sg$12.09.

— Indonesian shares rose 1.75 percent, or 63.27 points, to 3,685.30.

— Bangkok fell 1.53 percent, or 14.56 points, to 938.19.

Banpu added 2 baht to 602 while Siam Cement lost 2 baht to 298.

— Indian shares rose 2.01 percent or 337.05 points to 17,085.34.

India’s top property firm DLF rose 4.16 percent to 239.2 rupees while Hero MotoCorp, India’s largest motorcycle maker, rose 4.13 percent to 2,066.9 rupees, after posting a 19 percent jump in quarterly net profit.

— Wellington closed 0.64 percent, or 20.92 points, higher at 3,300.03.

Fletcher Building added 1.4 percent to NZ$6.39 and Restaurant Brands shed 6.5 percent to NZ$2.02.