Asian stock markets rise after Wall Street gains
Tuesday, August 23, 2011
BANGKOK (AP) — Asian stocks mostly inched higher Tuesday after gyrating markets on Wall Street and Europe ended with modest gains.
Oil prices rose above $85 per barrel as traders scaled back expectations that Libyan oil would be quickly restored to world markets as fighting raged inTripoli between rebels and forces loyal to leader Moammar Gadhafi.
The dollar was steady against the euro but up against the yen.
Global stocks have been volatile in recent weeks as investors swung between fears of a double-dip recession in the U.S. and hopes that Federal Reserve Chairman Ben Bernanke will announce some kind of action to help the economy during an annual economics conference in Wyoming on Friday.
Japan’s Nikkei 225 hovered near a five-month low, rising 0.5 percent to 8,675.65, and Hong Kong’s Hang Seng gained 0.6 percent to 19,596.30. South Korea’s Kospi jumped 3.6 percent to 1,772.39.
Australia’s S&P/ASX 200 rose 1.7 percent at 4,152.50. Brewer Foster’s Group Ltd. rose 1.4 percent after announcing it would return Australian dollars 500 million to investors through a share buyback or capital reduction. The move comes a week after Foster’s rejected a $10 billion cash takeover offer from London-based rival SABMiller PLC, saying the bid significantly undervalues the company.
Benchmarks in Singapore, Taiwan, the Philippines and mainland China were also higher. Stocks in Malaysia, India and Thailand slipped.
Investors found relief in expectations that oil prices would fall once Libyan rebels gain complete control of the capital Tripoli. A new government in Libya could clear the way for a return to oil production, which was halted six months ago amid a rebellion against the Gadhafi regime.
Falling oil prices also could help mitigate the effects of high inflation that has persisted across much of Asia, threatening growth prospects.
“The good thing is that the price of oil has come down. Over the coming months, we expect perhaps that will hold down core inflation,” said Tey Tze Ming, a trader at Saxo Capital Markets in Singapore. “Normally we need about two months to see if that filters into the inflation numbers.”
The prospect of lower oil prices also helped shares in airlines, whose profits improve when fuel prices drop. China Southern Airlines Co. gained 3.4 percent and South Korea’s Asiana Airlines rose 5.1 percent. Taiwan’s EVA Airways Corp. soared 6.9 percent.
Rising metals prices, especially gold — which ended Monday just shy of $1,900 an ounce — boosted mining shares. Energy Resources of Australia Ltd. shot up 7.5 percent. Australia’s Fortescue Metals Group gained 2.1 percent. Hong Kong-listed Zijin Mining Group, China’s biggest gold miner, rose 1.9 percent.
On Monday, the Dow Jones industrial average rose 0.3 percent to close at 10,854.65. The S&P 500 rose less than 0.1 percent to 1,123.82. The Nasdaq rose 0.2 percent to 2,345.38.
Bernanke’s speech Friday could have a major impact on markets, as it did last year when he hinted that the Fed was about to embark on a second round of bond buying known as quantitative easing to support financial markets and the economy.
The buying program ended in June. Some investors hope that Bernanke will reinstate bond purchases because of recent evidence of a weakening U.S. economy that triggered a stock market sell-off in August.
Benchmark oil for September delivery was up 69 cents to $85.11 a barrel in electronic trading on the New York Mercantile Exchange. Crude rose $1.86 to settle at $84.12 on Monday.
In London, Brent crude for October delivery was up 44 cents per barrel to $108.80 on the ICE Futures exchange.
The euro was nearly unchanged at $1.4374 from late Monday in New York. The dollar strengthened to 76.78 yen from 76.72 yen.