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Asian markets shrug off weak US economic data

Asian markets shrug off weak US economic data

May 18th, 2011 by PAMELA SAMPSON, AP Business Writer in News

BANGKOK (AP) - Asian stock markets shrugged off weak U.S. economic figures Wednesday as signs emerged in Japan of a quickening recovery from the earthquake and tsunami that devastated the country's industrial northeast.

Oil prices rose to near $98 a barrel after a crude supply report showed mixed signs about U.S. demand. The dollar was down against the euro and the yen.

Japan's Nikkei 225 index rose 1.1 percent to 9,667.26, helped by reports of a recovery in industrial production after massive disruptions following the March 11 earthquake and tsunami that wiped out much of the country's northeast.

Reports that Renesas Electronics Corp. - a major provider of microprocessors that control brakes, engines and transmissions for cars - will boost production at a key plant helped lift sentiment, Kyodo news agency reported, citing analysts. Renesas shares soared 5.4 percent.

Rising banking shares on Wall Street helped lift their Asian counterparts. Mizuho Financial Group Inc. rose 3.2 percent, Mitsubishi UFJ Financial Group Inc. was 2.1 percent higher, and Sumitomo Mitsui Financial Group rose 3.5 percent. But exporters slipped on the strengthening yen. Sony Corp. was 1.1 percent down, Sharp Corp. lost 0.7 percent, and Canon was 0.1 percent lower.

Peter Elston, a strategist at Aberdeen Asset Management in Singapore, said Asian stock markets were enjoying a bounce that was nothing "beyond a slight technical reaction to recent weakness."

"There are so many issues out there causing a bit of market indigestion, that's really what's caused the weakness in markets in recent days," he said.

South Korea's Kospi was 1.3 percent higher at 2,129.88, with automakers and shipbuilders leading the way. Hyundai Heavy Industries Co., South Korea's leading shipbuilder, shot up 6.9 percent. Kia Motors Corp. jumped 2.8 percent.

Hong Kong's Hang Seng rose 0.5 percent to 23,016.74 and Australia's S&P/ASX 200 was 0.3 percent higher at 4,695.80. Rising oil prices sent crude and energy shares higher. CNOOC Ltd., China's main offshore oil and gas producer, bounced 2.3 percent higher. Shanghai-listed Shanxi Guoyang New Energy Co. Ltd. rose 6.1 percent.

Stock-buying continues despite repeated signals of economic distress from Europe, the U.S. and elsewhere.

Greece, Ireland and Portugal have needed bailouts from their neighbors because of their high debt loads, and investors worry that more will have to be done to rescue the Greek economy. The U.S., too, has a debt crisis. The world's No. 1 economy reached its $14.3 trillion limit on federal borrowing Monday, leaving Congress 11 weeks to raise the borrowing threshold or risk a financial panic or another recession.

Meanwhile, stubbornly high inflation in China and India has led their central banks to hike interest rates and take other measures to contain the problem, but with questionable success. Such measures are often unwelcome by investors, who regard them as antigrowth.

On Tuesday, the Federal Reserve said U.S. factories produced fewer goods in April for the first time in 10 months. If the decline continues, it could cut into the earnings of companies that make industrial equipment. The Commerce Department also reported that construction of new homes plunged.

The Dow lost 68.79 points to 12,479.58. The S&P 500 lost less than 1 point to 1,328.98. The Nasdaq rose less than 1 point to 2,783.21.

Benchmark crude for June delivery was up 95 cents to $97.85 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost 47 cents to settle at $96.91 per barrel on Tuesday.

In currencies, the euro strengthened to $1.4274 from $1.4229 in late trading Tuesday in New York. The dollar weakened to 81.10 yen from 81.43 yen.