Asian markets rise as Italy vows debt crisis plan
HONG KONG—Asian markets rose Monday as Italy’s new leader vowed to pull the debt-laden country back from the brink of a fiscal disaster that has threatened to tear apart the eurozone.
Former European Union commissioner Mario Monti was nominated Sunday to replace Silvio Berlusconi as prime minister and pledged to get to work on tackling a crippling debt crisis in the eurozone’s third-largest economy.
Tokyo ended 1.05 percent higher, adding 89.23 points, to 8,603.70, while Sydney gained 0.19 percent, or 8.1 points, to 4,304.6 and Seoul climbed 2.11 percent, or 39.36 points, to 1,902.81.
Hong Kong finished 1.94 percent higher while Shanghai gained 1.92 percent by the close.
Sentiment also got a boost as debt-laden Greece ushered in a new government headed by the European Central Bank’s ex-deputy chief Lucas Papademos under a power-sharing deal between the country’s main rival parties.
“Investors are thinking these political developments will help Europe find a way out of its debt crisis,” said Peter Copeland, senior institutional trader with Sydney-based brokerage BBY.
“(But) a lot of people will see these developments as just kicking the can down the road.”
Italian lawmakers on Saturday approved a package of economic reforms that Berlusconi set as the precondition for his resignation amid global market turmoil.
Investors have been nervous for months as worries mounted over Greece’s accounts while Italy’s borrowing costs soared amid fears it would be the next eurozone country to collapse under a mountain of debt.
The European Union, which together with the International Monetary Fund is auditing Italy’s accounts, said it would monitor Rome’s reforms and that the country may need to pass extra austerity measures to tackle a staggering 1.9 trillion euro ($2.6 trillion) debt.
“Markets are likely to be cautious in their enthusiasm for the new governments at this stage,” Ric Spooner, chief markets analyst at CMC Markets in Sydney, told Dow Jones Newswires.
“Both have a fragile hold on political power and their capacity to implement the kinds of reform needed to restore market confidence is yet to be tested.”
In early European trade, Milan stocks were 1.44 percent higher, London’s FTSE 100 added 0.18 percent, Frankfurt’s DAX 30 gained 0.14 percent and the CAC 40 in Paris was 0.18 percent higher.
Asian markets also reacted to Japanese government data showing the country’s economy grew by 6.0 percent in the July-September quarter, the first gain since March’s earthquake and tsunami disaster.
In Tokyo, Olympus – which is embroiled in a loss-covering scandal – surged more than 17 percent as concerns eased that it would be delisted after the firm said it would file its earnings results by a December 14 deadline.
The stock exchange has warned it will be taken off the index if it does not file by the date.
US markets rose Friday on growing optimism over Europe’s debt problems, with the Dow Jones Industrial Average closing 2.18 percent higher.
The broad-based S&P 500 added 1.95 percent while the tech-heavy Nasdaq Composite gained 2.04 percent.
Traders will be keeping a close eye on key US economic figures due to be released this week, including October retail sales and housing starts.
On currency markets, the euro stood at $1.3725 in early European trade, a tad down from $1.3739 in New York late Friday. It was at 105.70 yen from 105.97 yen.
The dollar was slightly lower at 77.00 yen compared to 77.12 yen.
New York’s main oil contract, light sweet crude for December delivery, gained 16 cents to $99.15 a barrel and Brent North Sea crude, also for December, was 44 cents higher at $114.60.
Gold was trading higher at $1,781.15 an ounce by 0950 GMT, up from $1,763.50 on Friday.
In other markets:
— Singapore closed up 1.40 percent, or 39.20 points, at 2,830.14.
Olam International gained 2.10 percent to Sg$2.43 and Keppel Land advanced 1.48 percent to Sg$2.75.
— Taipei jumped 2.15 percent, or 158.36 points, to 7,525.65.
Leading smartphone maker HTC was 7.0 percent higher at Tw$688.0 while Taiwan Semiconductor Manufacturing Co rose 3.41 percent to Tw$75.9.
— Manila closed 1.02 percent, or 43.91 points, higher at 4,356.87.
Philippine Long Distance Co. rose 0.91 percent to 2,440 pesos while San Miguel Corp. gained 2.56 percent to 120 pesos. However, property giant Megaworld Corp. bucked the trend to fall 0.51 percent to 1.95 pesos.
— Wellington fell 0.37 percent, or 12.15 points, to 3,309.86.
Telecom shed 2.8 percent to NZ$2.62, Contact Energy lost 1.6 percent to NZ$5.48 and Air New Zealand slipped 0.5 percent to NZ$1.045 but Fletcher Building limited the market’s losses, rising 2.7 percent to NZ$6.43.
— Jakarta gained 1.43 percent, or 54.16 points, to 3,833.04.
Bank Mandiri rose 2.1 percent to 7,200 rupiah, cigarette maker Gudang Garam gained 2.5 percent to 62,000 rupiah and carmaker Astra added 3.6 percent to 72,000 rupiah.
— Kuala Lumpur ended 0.69 percent, or 10.12 points, higher at 1,478.87.
— Bangkok was 1.37 percent, or 13.31 points, up at 984.28.
— Mumbai fell 0.43 percent, or 74.08 points, to 17,118.74.
