Asian markets mostly up as Europe tension eases

HONG KONG—Asian markets mostly rose Friday after Greece named a new prime minister to push through urgent reforms while Italy’s borrowing costs eased as it searched for a successor to Silvio Berlusconi.

A day after regional markets suffered a huge sell-off over Italy’s growing debt crisis, a successful bond auction in Rome provided some respite.

However, trade was cautious after growth forecasts for the eurozone were massively slashed, raising the prospect of another recession.

Tokyo finished 0.16 percent, or 13.67 points, higher at 8,514.47 and Sydney gained 1.23 percent, or 52.4 points, to close at 4,296.5.

Seoul was 2.77 percent higher, adding 50.20 points, to end at 1,863.45, after losing almost five percent Thursday.

Hong Kong, which dived more than five percent in the previous session, regained some of those losses. The index added 0.91 percent, or 173.28 points, to 19,137.17.

Shanghai closed flat, adding 1.54 points to 2,481.08.

Former European Central Bank vice president Lucas Papademos was named as Greece’s interim prime minister, bringing a close to days of talks and providing the chance of some stability in the country.

And in Italy there were reports that former EU commissioner Mario Monti would likely replace Berlusconi as prime minister as pressure mounted on Rome to get its house in order to avoid becoming the next euro state to sink.

Also giving some encouragement was a fall in the yield on Italy’s 10-year bonds, which soared to a record 7.4 percent on Wednesday, a figure seen as unsustainable for it to service its $2.6 trillion debt.

On Friday, the rate dipped to 6.602 percent, although that figure was still dangerously high.

Rome was also able to complete a successful sale of five billion euros ($6.81 billion) of 12-month treasury bills, suggesting there was still some confidence in the economy.

Both Papademos and Monti are US-trained economists and are expected to embrace the reforms seen as necessary to place Greek and Italian finances on an even keel.

But the fragility of the situation continued to cap sentiment.

“The potential for further negative developments in Europe is keeping people cautious,” said Morgan Stanley Smith Barney vice president Shannon Briggs in Sydney. “Investors aren’t doing much. It’s painfully slow,” he told Dow Jones Newswires.

On currency markets, the euro was buying $1.3620 and 105.45 against $1.3615 and 105.60 yen.

The dollar was at 77.40, down from 77.51.

The extent of the crisis facing the region was highlighted as the European Commission said growth had stalled in 2011 and risked tipping back into contraction next year.

Growth across the eurozone in 2012 would shrink to 0.5 percent, said the forecast, a steep drop from its previous prediction of 1.8 percent.

Italy, the eurozone’s third-largest economy, would virtually stagnate in 2012 with growth of just 0.1 percent, according to the forecast.

There were even concerns about France, which has huge exposure to Greek debt, with the European Commission saying its economy was also stagnating.

The spread between benchmark 10-year French and German government bonds soared to a new record of 170.2 basis points amid speculation Paris would lose its top credit rating.

The slightly better outlook in Europe was enough to push Wall Street higher Thursday, with the Dow ending up 0.96 percent, the S&P 500 rising 0.86 percent and the Nasdaq up 0.13 percent.

US shares were also helped by better-than-expected weekly jobs numbers, which showed new claims for unemployment benefits falling to a seven-month low of 390,000 in the week ending November 5.

European stocks jumped in early trade Friday with London’s FTSE 100 index rising 0.97 percent, while Frankfurt added 0.23 percent and Paris shares gained 0.21 percent.

New York’s main oil contract, light sweet crude for delivery in December, lost 15 cents to $97.89 per barrel, while Brent North Sea crude for December delivery shed $1.26 to $112.37.

Gold was trading at $1,763.50 an ounce at 1100 GMT, down from $1,769.50 late Thursday.

In other markets:

— Taipei rose 0.80 percent, or 58.61 points, to 7,367.29.

HTC rose 1.26 percent at Tw$643.0 while Taiwan Semiconductor Manufacturing Co was 1.1 percent higher at Tw$73.4.

— Singapore’s Straits Times Index closed up 0.14 percent, or 4.04 points, to 2,790.94.

CapitaLand gained 1.89 percent to Sg$2.69 and Jardine Cycle and Carriage was up 0.90 percent to Sg$46.07.

— Kuala Lumpur shares fell 0.26 percent, or 3.90 points, to end at 1,468.75.

Developer Tiger Synergy lost 3.85 percent to 0.13 ringgit, while oil and gas firm SAAG Consolidated shed 6.25 percent to 0.08 ringgit. Telecommunication service provider TIME dotCom gained 3.05 percent to 0.68 ringgit.

— Indian shares fell 0.97 percent, or 169.28 points, to 17,192.82.

State Bank of India fell 3.48 percent to 1,797.48 rupees and SKS Microfinance slid 10 percent to 158 rupees.

— Bangkok market edged up 0.28 percent, or 2.67 points, to close at 970.97.

Coal producer Banpu shed 2 baht to 580 baht and PTT lost 1 baht to 300 baht.

— Manila was 0.65 percent higher, adding 27.90 points, to 4,312.96.

Philippine Long Distance Telephone Co. was up 0.75 percent at 2,418 pesos while International Container Terminal Services rose 1.91 percent to 56.15 pesos. Alliance Global Group fell 1.57 percent to 10.12 pesos.

— Indonesian shares lost 0.1 percent to 3,778.89.

Coal producer Bumi fell 2.2 percent to 2,275 rupiah, Bank Rakyat lost 0.7 percent to 6,850, while car maker Astra rose 0.5 percent to 69,500 rupiah.

— Wellington closed flat, edging 3.14 points higher to 3,322.01.

Telecom Corp. was flat on NZ$2.695, with Fletcher Building down 0.3 percent at NZ$6.26 and Air New Zealand up 0.5 percent to NZ$1.05.