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Business

Asian stocks rally ahead of EU bailout summit

Video by William EDWARDS

Text by News Wires

Latest update : 2011-10-24

Asian stock markets performed well in trading Monday, with the Hang Seng soaring to 3.92 per cent. Some experts attributed the rally to optimism that the EU will push through its long-debated bailout fund when it meets this Wednesday.

AP - Asian stock markets jumped Monday, buoyed by hopes of progress in resolving Europe’s debt crisis and positive export figures from Japan that point toward a recovery from a devastating tsunami earlier this year.

Oil prices rose above $88 a barrel. The dollar fell against the euro but rose against the yen.

Japan’s Nikkei 225 index added 1.8 percent to 8,830.63 after the government said exports grew for a second straight month in September.

Hong Kong’s Hang Seng soared 3.9 percent to 18,731.74 and South Korea’s Kospi climbed 2.9 percent to 1,892.40. Benchmarks in Singapore, Taiwan, Australia, India, Indonesia and the Philippines were also higher.

Mainland China’s Shenzhen Composite Index slipped 0.8 percent to 951.89 while the Shanghai Composite Index for China’s main stock market gained 0.4 percent to 2,325.30.

European leaders are to meet Wednesday to hammer out a concrete resolution to the region’s debt problems, including ways to fortify the euro 440 billion ($600 billion) bailout fund to help prevent larger economies that use the euro common currency, such as Italy, from being dragged into the crisis.

Weeks of intensive discussions by European leaders have so far failed to produce a decisive outcome.

“Markets will remain nervous ahead of Wednesday’s EU summit, hoping that officials can settle their differences and emerge with a concrete solution. In this respect, the risk of disappointment is high,” Credit Agricole CIB said in a research note.

Japan’s Finance Ministry said Monday that exports rose 2.4 percent in September compared with a year earlier, marking the second consecutive month of growth. Japan’s exports suffered a five-month decline in the wake of the March 11 earthquake and tsunami that devastated northeast Japan.

South Korean constructions shares rose on expectations that the death of Libyan leader Moammar Gadhafi would lead to the resumption of construction projects in the North African country, Yonhap News Agency reported. Daewoo surged 5 percent. Hyundai Heavy Industries jumped 6.4 percent.

Chinese banking shares soared ahead of earnings reports to be released this week, analysts said. Hong Kong-listed Agricultural Bank of China jumped 8.8 percent, and Industrial and Commercial Bank of China gained 5.8 percent.

Linus Yip, strategist at First Shanghai Securities in Hong Kong, said speculative investors appeared to be scooping up what were thought to be bargain-priced Hong Kong stocks.
“Today, there is some bargain-hunting for sectors like the Chinese insurance sector and Hong Kong property,” he said. Hong Kong-listed Ping An Insurance gained 6.8 percent. China Overseas Land & Investment Ltd. was up 6.7 percent.

In the U.S. on Friday, enthusiasm for stocks was on the upswing amid some positive third-quarter earnings reports from U.S. companies, which come despite a weak economy. Among S&P 500 companies reporting so far, seven out of ten have posted higher profits than expected.

The Dow Jones industrial average jumped 267.01 points, or 2.3 percent, to 11,808.79. The Dow is now up 2 percent from where it started 2011. Before Friday’s surge, it was down for the year. The Dow has risen for four weeks straight, the first time that has happened since January.

In currencies, the euro rose to $1.3902 from $1.3864 Friday in New York.

The dollar rose to 76.21 yen from 76.12 yen.

Benchmark crude for December delivery was up 79 cents at $88.20 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.33 to settle at $87.40 in New York on Friday.

Brent crude was up 70 cents at $110.26 a barrel on the ICE Futures Exchange in London.
 

 

Date created : 2011-10-24

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