Asian shares mostly up on Europe hopes
HONG KONG—Asian markets climbed for a second day Tuesday on optimism that Europe’s finance leaders are close to a plan to tackle debt despite a warning that the crisis could spark another depression.
Traders also reacted to a strong cue on Wall Street, which surged after a record post-Thanksgiving shopping weekend.
Tokyo jumped 2.30 percent, or 190.33 points, to 8,477.82, Sydney added 1.08 percent, or 43.9 points, to 4,102.1 and Seoul surged 2.27 percent, or 41.24 points, to 1,856.52.
Hong Kong was 1.21 percent, or 218.39 points, higher at 18,256.20 while Shanghai climbed 1.23 percent, or 29.36 points, to 2,412.39.
The gains came even as the Organization for Economic Cooperation and Development said if the eurozone crisis led to the exit of even one country it “would most likely result in a deep depression in both the exiting and remaining euro area countries as well as in the world economy.”
Polish Foreign Minister Radek Sikorski said the eurozone’s collapse would result in an “apocalyptic” crisis.
Moody’s Investors Service warned that all European Union sovereign debt ratings, not just those of teetering nations such as Italy, Greece and Portugal, were at risk.
And rival agency Fitch downgraded Washington’s outlook to negative as it projected slow growth, political stalemate and rising levels of debt this decade.
However, eyes were on a meeting later Tuesday in Brussels, with reports suggesting key leaders were considering a push for strict new budget rules for member states to fix the crisis, rather than recommending changes to EU treaties, which could take years.
The meeting comes after US President Barack Obama told top European officials Monday they must act decisively to avoid plunging the world into another downturn.
“This is of huge importance to our own economy,” Obama said, after meeting European Council President Herman Van Rompuy, European Commission President Jose Manuel Barroso and EU foreign policy chief Catherine Ashton.
The confident view on Tuesday’s finance ministers’ meeting in Brussels boosted the euro in early European trade. The common unit bought $1.3340 compared with $1.3318 late Monday in New York, while it was at 103.94 yen, from 103.83 yen.
The dollar traded at 77.91 yen, marginally down from 77.97 yen.
Adding upward momentum to regional equities was a surge on Wall Street, where investors digested data showing Black Friday – the biggest shopping day of the year and the start of the Christmas season – saw record takings.
The Dow jumped 2.59 percent, the Nasdaq surged 3.52 percent and the S&P 500 added 2.92 percent.
Asian shares surged Monday on a report that the International Monetary Fund was planning a $800 billion bailout for Italy. Despite that story later being denied by the US-based organization, stocks continued to rally.
Analysts said investors were unconvinced by the denial.
In Sydney stocks rose despite the government announcing Aus$11.5 billion ($11.47 billion) in spending cuts and savings over the next four years while lowering its 2012-2013 growth outlook as the global economic turmoil savaged revenues.
The market was given a lift by news Fitch had upgraded mining-driven Australia’s credit rating to AAA, from AA-plus, with all three of the major ratings agencies now having Australia at AAA.
The Australian dollar sank to 98.88 US cents from 99.20 US cents after the news but rebounded in the afternoon to sit at 99.72 cents.
On oil markets New York’s main contract, light sweet crude for delivery in January, fell 26 cents to $97.95 a barrel in the afternoon.
Brent North Sea crude for January delivery was up 3 cents at $109.03.
Gold was trading at $1,707.90 an ounce at 0950 GMT, from $1,711.89 late Monday.
In other markets:
— Singapore closed down 0.23 percent, or 6.33 points, at 2,688.10.
DBS Group rose 0.91 percent to Sg$12.25 while Singapore Airlines shed 0.48 percent to Sg$10.35.
— Taipei added 1.30 percent, or 89.87 points, to 6,988.65.
Leading smartphone maker HTC surged 4.77 percent to Tw$494.0 while IC design house MediaTek was 0.53 percent higher at Tw$282.5.
— Manila slipped 0.40 percent, or 16.84 points, to 4,211.04.
Bank of the Philippine Islands shed 0.28 percent to 52.40 pesos while International Container Terminal Services Inc. dropped 5.09 percent to 54 pesos.
— Wellington gained 0.65 percent, or 21.03 points, to 3,239.47.
Telecom lifted 0.8 percent to NZ$1.99, Fletcher Building closed up 0.2 percent at NZ$5.8 and Fisher & Paykel Appliances fell 1.4 percent to NZ$0.36.
— Jakarta climbed 1.12 percent, or 40.72 points, to 3,687.77
Bank Mandiri gained 2.3 percent to 6,500 rupiah and Bank Rakyat added 1.6 percent to 6,500 rupiah, while carmaker Astra International closed up 2.6 percent at 70,950 rupiah and Telkom fell 2.2 percent to 7,150 rupiah.
— Kuala Lumpur was 0.92 percent, or 13.17 points, higher at 1,444.72.
Banking group AMMB Holdings added five percent to 5.92 ringgit, while Telekom Malaysia fell 2.5 percent to end at 4.25 ringgit.
— Bangkok was 0.39 percent, or 3.88 points, higher at 988.06.
— Mumbai slid 0.98 percent, or 158.79 points, to 16,008.34 as pressure mounted on the government to backtrack on reforms opening the retail sector to foreign chains.
Pantaloon Retail, part of the Future Group that also runs Big Bazaar supermarkets, slid 11.89 percent to 196.8 rupees while the Tata group’s Trent retail arm fell 3.78 percent to 985.9.
