Asian stocks rise as Japan factory output rebounds
Originally published May 30, 2011 at 10:38 p.m., updated May 31, 2011 at 12:58 a.m.
HONG KONG (AP) — Asian stocks were mostly higher on Tuesday following a report that Japan’s factory output rebounded from a record drop following the devastating earthquake and tsunami.
Investors were also more optimistic amid signs that the Greek debt crisis may be easing.
Oil prices rose above $101 a barrel, and the dollar strengthened against the yen but weakened against the euro.
Japan’s Nikkei 225 stock average rose 1.4 percent to 9,654.54. Industrial output rose 1 percent in April after a record 15.5 percent drop in March, when the country’s economy was slammed by supply disruptions in the wake of the twin disasters. The government also said factory output — a key barometer of Japan’s economic health — will pick up speed in the coming months.
South Korea’s Kospi jumped 1.8 percent to 2,131.98 while Australia’s S&P/ASX 200 gained 1 percent to 4,708.30. Hong Kong’s Hang Sang was up 1.1 percent to 23,398.25. Benchmarks in Taiwan, Singapore, India and Thailand also rose.
Shares in mainland China, however, fell as investors feared further interest rate hikes aimed at keeping inflation in check, analysts said. Shanghai’s Composite Index was down 0.1 percent 2,702.86.
“The euro debt crisis seems to be already eased,” said Castor Pang, research director at Core Pacific-Yamaichi in Hong Kong. “At least for the short term, the rebound will continue.”
The rebound followed a day of muted trading on Monday amid reports that European officials were preparing new support measures for Greece.
A top European Central Bank official was quoted by the Financial Times on Monday as saying Greece could get another 20 billion ($28 billion) in aid from its fellow euro countries and raise three times that through new austerity measures such as selling government property.
Stocks markets were closed in the United States on Monday for a holiday. Markets were also closed in Britain, and markets in Germany and France edged lower on thin trading volumes.
“Sentiment appears to be slightly more upbeat today despite the ongoing speculation about the fate of Greece and its debt burden. Commodity prices have firmed whilst equity volatility has eased. However, the market is likely to continue to gyrate between risk on and risk off over coming days,” strategists at Credit Agricole CIB wrote in a research note.
Chinese power companies rose after Xinhua reported Monday that electricity rates would be raised for some industrial users. The move is presumably aimed at encouraging conservation and prodding utilities saddled with losses from surging coal and oil costs to produce more electricity.
Datang International Power Generation Co., which operates more than 100 power companies in 18 Chinese provinces, rose 1.4 percent in Hong Kong. Huadian International Power Corp. rose 1.8 percent while Huaneng Power International Inc. rose 1.3 percent.
“It seems that an increase in electricity fees will be the short term stimulus for independent power producers,” Pang said.
Benchmark oil for July delivery was up 48 cents to $101.07 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The benchmark contract last settled up 36 cents at $100.59 on Friday. Markets in the U.S. were closed Monday for the Memorial Day holiday.
In London, Brent crude for July delivery was up 46 cents to $115.14 a barrel on the ICE Futures exchange.
The euro strengthened to $1.4383 from $1.4344 in late trading Monday. The dollar rose to 81.22 yen from 80.86 yen.