Asian shares up on US data but Europe caps gains
HONG KONG—Asian shares rose Tuesday, following a lead from Wall Street after more upbeat US data, although a Franco-German meeting on ramping up plans to save the euro received a tepid response.
Tokyo gained 0.38 percent, or 31.91 points, to 8,422.26, Sydney added 1.14 percent, or 46.8 points, to 4,152.2 and Seoul jumped 1.46 percent, or 26.73 points, to 1,853.22.
Hong Kong closed 0.73 percent, or 138.56 points, higher at 19,004.28 and Shanghai soared 2.69 percent, or 59.85 points, to 2,285.74.
In the United States, data showed a 9.9 percent surge in consumer credit in November, the biggest increase in a decade.
Credit card spending was up 8.5 percent, while non-revolving loans, including university and automobile loans, jumped 107 percent.
It added to the growing sense that a recovery in the world’s biggest economy is showing signs of strength, coming days after a fall in the unemployment rate and a bigger-than-forecast rise in job creation.
The Dow finished 0.26 percent higher on Monday, the Nasdaq added 0.09 percent and the S&P 500 rose 0.23 percent.
However, there were warnings that the recent string of good numbers might not mean the recovery is gathering pace.
“There’s certainly an air of confidence in analyst commentaries as the year gets under way,” David Croy, strategist at ANZ Bank in Wellington, said.
“But we can’t help wondering if the market has gotten ahead of itself, and setting itself up for disappointment on the data front, especially in the US,” he told Dow Jones Newswires.
The ongoing sovereign debt crisis in Europe showed no sign of abating despite German Chancellor Angela Merkel and French President Nicolas Sarkozy holding a meeting on the eurozone crisis.
Sarkozy said after the talks that an agreement on stricter budgetary rules tying in all EU members except Britain should be signed by March 1.
Merkel said negotiations were “progressing well” and announced Paris and Berlin could accelerate payments into a permanent fund for possible future bailouts that is due to come into force later this year.
“The situation is tense, very tense,” Sarkozy said.
Earlier Monday, data showed banks parked a record sum of cash at the European Central Bank, suggesting they are wary of lending to each other and stoking concerns of a credit crunch.
Figures also showed industrial output in Germany, Europe’s top economy, fell in November, weighed by declining activity in all sectors except construction.
In Athens, the International Monetary Fund reportedly expressed growing doubts about Greece’s long-term ability to reduce its debts.
Adding to worries, Fitch Ratings said Tuesday that Italy, the eurozone’s third-largest economy, was the country that poses the greatest risk to the eurozone owing to the size of its debt burden and heavy costs of borrowing.
In China, dealers were given support after the securities regulator pledged broad reforms to the country’s capital markets, including boosting investment in the stock market, which is near a three-year low.
The China Securities Regulatory Commission said Beijing would encourage institutional investors – including the national pension fund – to increase their market holdings, according to a statement Monday.
Guo Shuqing, the commission’s chairman, also said in the statement that the government would allow foreign institutions to invest more in Chinese stocks through existing schemes.
His comments follow Premier Wen Jiabao’s promise to introduce more measures to support the stock market.
Shanghai shook off data showing the country’s exports had slowed and its trade surplus shrank due to the debt woes in Europe and the United States.
In early trade Tuesday, London’s benchmark FTSE 100 index rose 0.90 percent, Frankfurt’s DAX 30 advanced 1.22 percent while in Paris the CAC 40 jumped 1.26 percent.
The euro remained weak against major currencies but rebounded from a 16-month low against the greenback seen on Monday.
The common currency bought $1.2799 and 98.37 yen, compared with $1.2760 and 97.90 yen in New York overnight. However, it is well up from the $1.2666 seen Monday, which was its lowest since September 2010.
The dollar fetched 76.85 yen, compared with 76.84 yen in New York.
On oil markets, New York’s main contract, West Texas Intermediate for delivery in February, was up 97 cents to $102.85 a barrel.
Brent North Sea crude for February gained 48 cents to $113.35 a barrel.
Gold was at $1,627.90 an ounce by 1050 GMT against $1,620.60 late Monday.
In other markets:
— Manila gained 0.43 percent, or 19.48 points, to 4,561.08.
The index is sitting at a record high, driven mainly by foreign funds rebuilding their portfolios amid prospects of steady growth in corporate earnings, dealers said.
Philippine Long Distance Telephone added 0.1 percent to 2,698 pesos, Metropolitan Bank & Trust rose 0.7 percent to 75.50 pesos and Ayala Corp. advanced 0.6 percent to 342 pesos.
— Singapore closed up 1.06 percent, or 28.55 points, to 2,719.83.
Oil rig maker Keppel Corp. gained 4.08 percent to Sg$9.94 and Oversea-Chinese Banking Corp. was up 0.75 percent to Sg$8.04.
— India shares jumped 2.22 percent, or 350.37 points, to 16,169.04.
Auto and farm equipment maker Mahindra and Mahindra rose 5.63 percent to 689.95 rupees while aluminium producer Hindalco added 4.28 percent to 123 rupees.
Engineering giant Larsen and Toubro advanced 4.24 percent to 1,134.55.
— Indonesian shares rose 1.3 percent, or 49.77 points, to 3,938.84.
Bukit Asam gained 4.1 percent to 19,050 rupiah and Bank Mandiri added 2.2 percent to 6,850 rupiah.
— Bangkok gained 0.78 percent, or 8.20 points, to 1,053.04.
Banpu rose 3.23 percent to 576 baht, while PTT closed unchanged at 324 baht.
— Taipei climbed 1.21 percent, or 85.83 points, to 7,178.87.
Taiwan Semiconductor Manufacturing Co. rose 1.19 percent to Tw$76.5 while HTC fell 1.64 percent to Tw$449.5.
— Kuala Lumpur closed flat at 1,521.99.
Telecommunications group Axiata climbed 0.2 percent at 4.99 ringgit as the chemical arm of national oil company Petronas rose 0.5 percent at 6.36 ringgit while gaming giant Genting slid 0.8 percent at 3.88 ringgit.
— Wellington fell 0.59 percent, or 19.27 points, to 3,228.01.
Fletcher Building was down 1.86 percent at NZ$5.80 and Contact Energy dived 3.8 percent to NZ$5.10.
