Asian stocks rise following healthy US earnings
Wednesday, July 20, 2011
HONG KONG (AP) — World stock markets rose Wednesday, boosted by healthy earnings reports from U.S. companies and optimism that U.S. and European politicians may be closer to working out their debt problems.
Crude oil climbed above $98 while the dollar weakened against the euro and yen.
Investors took heart after big U.S. companies such as Coca-Cola Co., IBM and Apple reported better quarterly earnings. Coca-Cola said income rose 18 percent on strong overseas sales, while IBM beat analyst estimates. Apple said sales of iPads and iPods helped profits more than double.
News that U.S. politicians were making some headway on a plan to reduce the deficit and raise the $14.3 trillion debt limit to avoid a default also added some optimism. Investors were also keeping an eye on Europe’s debt crisis ahead of a meeting Thursday of European Union leaders in Brussels to discuss a second bailout package for Greece.
“Hopes of some form of a deal for Greece have grown and even disparaging comments from the German chancellor about any agreement being reached failed to dent confidence too much,” strategists at Credit Agricole CIB said in a research note.
Chancellor Angela Merkel said Tuesday that the summit wouldn’t yield a quick and comprehensive solution to deal with the debt crisis. She said there won’t be anything as “spectacular” as a restructuring of Greek debt or an agreement on eurobonds.
Investors aren’t expecting the European or U.S. debt problems to become major issues, “but it will take some time to settle,” said Steven Lam, a vice president at Karl Thomson Securities in Hong Kong.
In early European trading, the FTSE 100 index of leading British shares was up 0.7 percent at 5,829.21, while Germany’s DAX rose 0.5 percent to 7,230.74. The CAC-40 in France was 0.9 percent higher at 3,725.89.
U.S. stocks were poised to rise. Dow futures were up 0.3 percent to 12,548, while broader S&P 500 futures rose 0.4 percent to 1,326.10.
In Asia, Japan’s Nikkei 225 stock average rose 1.2 percent to close at 10,005.90 and South Korea’s Kospi was up 1.2 percent to end at 2,154.95. Australia’s benchmark S&P/ASX 200 jumped 1.8 percent to 4,549.70.
Hong Kong’s Hang Seng climbed 0.1 percent to close at 22,003.69. Benchmarks in Taiwan, Singapore and New Zealand also rose.
Mainland Chinese shares spent most of the day fighting to get into positive territory. The Shanghai Composite Index ended the day 0.1 percent lower at 2,794.20.
“We had a flat market today. The potential risk of the local debts still weighted on the market,” said Peng Yunliang, a strategist with Shanghai Securities, referring to concerns that local governments in China have run up huge debts from state-owned banks.
“Investors also believe the policy of monetary tightening will not change in the near future,” as China’s government works to keep rampant inflation under control, he added.
In currencies, the dollar fell to 78.83 yen from 79.24 yen late Tuesday in New York. The euro, meanwhile, rose to $1.4188 from $1.4134.
Oil prices rose above $98 in Asia after a report showed U.S. crude supplies dropped more than expected, a sign demand may be improving.
Benchmark oil for August delivery was up 79 cents to $98.29 a barrel in electronic trading on the New York Mercantile Exchange. Crude rose $1.57 to settle at $97.50 on Tuesday.
Researcher Yu Bing in Beijing contributed to this report.
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