Asian shares advance as Japan production rises
Monday, February 28, 2011
BANGKOK (AP) — Asian shares were higher Monday as Japanese industrial production rose and traders cautiously pushed aside worries over political turmoil in OPEC-member Libya.
Oil prices jumped to near $100 a barrel as Libya’s violent power struggle continued to disrupt crude output in the OPEC nation. In currencies, the dollar was slightly up against the yen but lower against the euro.
Tokyo said industrial production rose for a third straight month in January, as overseas demand for Japanese goods continues to accelerate, good news for Japan’s economy, which is heavily dependent on foreign markets.
The Nikkei 225 stock average rose 0.9 percent to 10,616.40 after a sluggish start that took the index temporarily into negative territory. Export-driven companies rose, including Toyota Motor Corp., up 1.2 percent; Hitachi Ltd., up 1.9 percent; and Toshiba Corp., up 0.4 percent.
Hong Kong’s Hang Seng added 0.8 percent to 23,193.29 while China’s Shanghai Composite index was up 0.3 percent to 1,284.26. Shares in the Philippines, India and New Zealand — where a major earthquake devastated the city of Christchurch last week — also edged up.
Seoul’s Kospi index dropped 0.8 percent to 1,948.03 following threats by North Korea to retaliate against South Korea for participating in annual military drills with the U.S.
Australia’s S&P/ASX 200 was off 0.1 percent at 4,830.50. Major stock averages in Singapore and Thailand were also lower.
Analysts said investors were looking ahead to Federal Reserve chairman Ben Bernanke’s testimony about economic policy before congressional committees in Washington on Tuesday and Wednesday. His testimony will be closely watched for signals about when the Fed is likely to start raising interest rates from record lows.
“This will be an important week in deciding if the Fed will lag other major central banks in hiking rates, which in turn, would set the US dollar on a depreciation path,” analysts at DBS Bank Ltd. in Singapore said in a report.
“Even so, market sentiment remains fragile because of fear that last week’s spike in oil prices from the Libyan political crisis could hurt the global economy like in the 1970s.”
Concerns over oil production eased late last week after the International Energy Agency said Thursday that the impact of fighting on Libyan oil supplies was far less than analysts had estimated and that any shortfall could be easily made up by tapping oil reserves in other countries.
Libya is Africa’s largest producer of oil but only ranks 15th among the world’s oil exporters. Traders have been concerned that unrest could not only threaten Libya’s oil production but also spread to other countries in the region such as Saudi Arabia.
Gains in Asia mirrored rises on Wall Street on Friday. The Dow Jones industrial average rose 0.5 percent to 12,130.45, while the broader Standard & Poor’s 500 index closed up 1.1 percent at 1,319.88.
But both indexes were still down last week overall, largely due to concerns over fighting in Libya and the effect on oil prices.
In currencies, the dollar rose to 81.67 yen from 81.63 yen late Friday. The euro was slightly higher, at $1.3758 from $1.3748.