Asian shares mixed ahead of key Europe summit
HONG KONG—Asian shares were mixed on Tuesday with investors taking a breather from the previous day’s rally as they nervously await a crucial summit aimed at tackling the eurozone debt crisis.
Wall Street gave a strong cue as dealers there were buoyed by solid corporate earnings reports and hopes that progress was being made by European leaders on the region’s fiscal problems.
“It’s a consequence of the strong gains and a little bit of caution before Wednesday’s EU summit,” Macquarie Private Wealth investment adviser James Rosenberg said in Australia. “Sure there’s optimism on Europe, but this will be their 14th crisis meeting in 21 months.”
Tokyo slipped 0.92 percent, or 81.67 points, to 8,762.31 and Sydney closed down 0.64 percent, or 27.1 points, at 4,227.9 while Seoul lost 0.51 percent, or 9.67 points, to end at 1,888.65.
However, Hong Kong jumped 1.05 percent, or 196.38 points, to 18,968.20 and Shanghai rose 1.66 percent, or 39.34 points, to 2,409.67. Both markets rose on Chinese data showing a pickup in manufacturing activity on the mainland.
Attention has been fixed on Europe, where debt crises in Greece, Italy and Spain have raised concerns that at least one of them could default on their repayments, leading to a credit crunch and possibly another global meltdown.
However, European leaders, including French President Nicolas Sarkozy and IMF chief Christine Lagarde, on Sunday said “good progress” had been made in a summit on the crisis.
They announced few details but promised to reveal all after a second round of high-level talks on Wednesday.
The eurozone wants to beef up its 440-billion-euro ($610 billion) rescue fund, the European Financial Stability Facility, to convince markets it has the means to protect highly indebted nations.
Leaders also want to agree on a huge write-down on the debt of stricken Greece and make sure banks have enough firepower to withstand these losses.
Despite the Europeans’ progress, there are concerns they might not be able to do enough because of their many differences.
Investors want to see the recent assurances turned into a definitive and binding agreement Wednesday.
Chancellor Angela Merkel needs an approval of Germany’s parliament before she can back a plan to boost the bailout fund at the summit.
“With high expectation being priced in, any under-delivery will disappoint the market and spark a sell-off,” Credit Agricole strategist Mitul Kotecha told Dow Jones Newswires.
While optimism over Europe provided a strong base, US shares were also pushed higher by strong corporate earnings.
Among the standout reports was Caterpillar, the world’s leading manufacturer of heavy construction and mining equipment, which posted a 44 percent profit rise on robust revenues.
Often considered a bellweather of the global economy, Caterpillar said it had its best-ever quarter for sales and an order backlog at an all-time high.
The Dow gained 0.89 percent, the Nasdaq added 2.35 percent and the S&P 500 climbed 1.29 percent.
European stocks slid in cautious opening trade on Tuesday, with London’s benchmark FTSE 100 index losing 0.13 percent to 5,541.05 points, Frankfurt’s DAX 30 dipping 0.47 percent to 6,026.45 points and in Paris, the CAC 40 weakened 0.41 percent to 3,207.81.
On currency markets, the dollar stood at 76.12 yen, little changed from 76.10 yen.
The euro fetched $1.3942 from $139.30, and 106.17 yen from 106.00 yen.
New York’s main oil contract, light sweet crude for December delivery, gained 95 cents to $93.80, while Brent North Sea crude for December rose 17 cents to $111.75.
By 1100 GMT, gold was trading at $1,662.00 an ounce, up from $1,660.05 earlier Tuesday.
In other markets:
— Taipei rose 0.28 percent, or 20.91 points, to 7,491.21.
Hon Hai rose 3.82 percent to Tw$78.8 while TSMC was 0.28 percent lower at Tw$71.5.
— Indian shares rose 1.86 percent, or 315.58 points, to 17,254.86.
India’s private housing finance firm HDFC rose 4.32 percent to 668.4 rupees while Sterlite Industries, the local arm of global resources Vedanta group, closed up 4.53 percent to 121.2.
— Singapore closed 0.33 percent, or 8.99 points, higher at 2,769.94.
Singapore Telecom eased 0.62 percent to Sg$3.19 and casino operator Genting Singapore was up 0.93 percent to Sg$1.635.
— Kuala Lumpur shares gained 0.54 percent, or 7.78 points, to end at 1,457.80.
Budget carrier AirAsia added 1.04 percent to 3.88 ringgit, while UEM Land Holdings climbed 0.51 percent to 1.99. Axiata Group lost 0.21 percent to 4.84 ringgit.
— Bangkok rose 2.86 percent or 26.21 points to close at 942.55.
Banpu added 14 baht to 596, while Siam Cement gained 17 baht to 306.
— Manila gained 0.98 percent, or 41.44 points, to close at 4,242.54.
Philippine Long Distance Telephone rose 1.76 percent to 2,306 pesos while Metro Pacific Investment Corp. added 4.92 percent to 3.20 pesos.
— Wellington closed 0.46 percent, or 15.21 points, higher at 3,296.63.
Sky Television rose 3.4 percent to NZ$5.56 and Telecom put on 0.4 percent at NZ$2.56.
