Asian markets rise ahead of European summit

An investor looks at the stock price update on a monitor at a private securities company in Shanghai, China, Tuesday, May 22, 2012. Hopes EU leaders will come to an agreement on dealing with the eurozone debt crisis helped push Asian stock markets higher Tuesday. AP PHOTO

HONG KONG—Asian markets rose Tuesday following a strong performance on Wall Street and on hopes EU leaders will come to an agreement on dealing with the eurozone debt crisis at an upcoming summit.

Tokyo gained 1.10 percent, or 95.40 points, to end at 8,729.29, Seoul rose 1.64 percent, or 29.56 points, to 1,828.69 and Sydney climbed 1.16 percent, or 47.4 points, to 4,121.0.

Hong Kong climbed 0.62 percent, or 116.83 points, to 19,039.15 and Shanghai added 1.07 percent, or 25.01 points, to 2,373.31.

After the markets closed, Fitch cut Japan’s credit rating by two notches, citing the country’s massive public debt as Tokyo struggles to set the world’s third-largest economy on a growth track.

Attention is now on an informal meeting in Brussels on Wednesday where the crippling debt crisis that threatens the eurozone project will be top of the agenda.

“People are feeling a little more optimistic because European leaders look as though they might put some strong growth policies in place rather than just austerity,” Stan Shamu, market strategist at IG Markets in Australia, told Dow Jones Newswires.

Ahead of the talks dealers were given a boost by Germany and France who said Monday they would do whatever it takes to keep Greece in the euro amid political turmoil in the country.

“We agreed that we have to do everything to keep Greece in the euro club,” said German Finance Minister Wolfgang Schaeuble after the first official meeting with his new French counterpart Pierre Moscovici.

Schaeuble hosted Moscovici to thresh out a common line for the summit, after Germany was seen as being more isolated over its drive for austerity as the answer to the ongoing debt crisis.

Greece has returned as the key issue in Europe after polls on May 6 saw 70 percent of the electorate vote against pro-austerity parties but with no overall winner.

Many now fear a new vote on June 17 will see a victory for parties who campaigned against a bail-out plan, which would in turn lead Athens to default on its debt obligations and leave the euro.

There are also concerns about the state of Spain’s banks, which are staggering under huge bad loans after a 2008 property crash. Economy Minister Luis de Guindos forecast the Spanish economy would contract this quarter at the 0.3 percent rate it has for the past half year.

On currency markets the euro eased from a small rally in New York that was fuelled by hopes for the EU meeting.

It bought $1.2772 and 101.75 yen in early European trade Tuesday, compared with $1.2815 and 101.62 yen in New York late Monday. But the single currency was still up from the four-month low of $1.2642 seen Friday.

The dollar was at 79.71 yen Tuesday against 79.30 yen.

On Wall Street Monday the main indexes posted strong gains. The tech-rich Nasdaq was the best performer, up 2.46 percent as a strong showing from two of its biggest firms Apple and Google outweighed an 11 percent slump in market debutant Facebook.

The Dow finished up 1.09 percent and the S&P 500 climbed 1.60 percent.

Oil prices were up in afternoon Asian trade, with New York’s main contract, light sweet crude for delivery in June, 43 cents higher at $93.00 a barrel on its last trading day, and Brent North Sea crude for July gaining 11 cents to $108.92.

Gold was $1,577.80 an ounce at 1055 GMT, compared with $1,596.40 late Monday.

In other markets:

— Singapore closed up 1.20 percent, or 33.59 points, at 2,823.75.

Palm oil producer Wilmar International gained 4.21 percent to Sg$3.96 while United Overseas Bank was up 2.24 percent at Sg$17.80.

— Taipei rose 1.15 percent, or 82.66 points, to 7,274.89.

Leading smartphone maker HTC surged 6.02 percent at Tw$431.5 while Hon Hai Precision added 4.81 percent at Tw$87.2.

— Manila closed flat, edging up 4.43 points to 4,958.43.

Philippine Long Distance Telephone Co. eased 0.08 percent to 2,392 pesos and Philex Mining shed 0.60 percent to 24.85 pesos.

— Wellington gained 1.04 percent, or 36.47 points, to 3,529.86.

Telecom was up 3.5 percent at NZ$2.64 and Fletcher Building advanced 1.8 percent to NZ$6.38 while Contact Energy added 0.41 percent to NZ$4.86.

— Kuala Lumpur added 0.52 percent, or 7.93 points, to 1,546.84.

British American Tobacco climbed 2.7 percent to 52.80 ringgit and KLCC Property Holdings gained 3.1 percent to 3.30 ringgit.

Telekom Malaysia shed 0.6 percent to 5.25 ringgit.

— Bangkok slipped 0.32 percent, or 2.64 points, to 1,131.52.

Coal producer Banpu fell 4.55 percent to 462 baht, while Siam Cement added 0.92 percent to 330 baht.

— Jakarta climbed 2.06 percent, or 80.99 points, to 4,021.10.

Nickel miner Aneka Tambang rose 1.4 percent to 1,480 rupiah, cement maker Semen Gresik added 1.4 percent to 11,050 rupiah and cigarette maker Gudang Garam jumped 4.4 percent to 59,900 rupiah.

— Mumbai fell 0.97 percent, or 156.85 points, to 16,026.41.

India’s largest passenger car maker Maruti Suzuki slipped 4.5 percent to 1,145 rupees while private Tata Power slid 5.29 percent to 90.45 rupees.