Jefferson City, MO 77° View Live Radar Mon H 93° L 69° Tue H 90° L 68° Wed H 88° L 71° Weather Sponsored By:

Asia stocks rise on hopes for Europe debt action

Asia stocks rise on hopes for Europe debt action

September 28th, 2011 by PAMELA SAMPSON, AP Business Writer in News

BANGKOK (AP) - Asian stock markets moved cautiously higher Wednesday as European leaders inched toward a plan for containing a debt crisis that threatens to derail global economic growth.

Benchmark oil hovered above $83 per barrel while the dollar gained against the euro but fell against the yen.

Japan's Nikkei 225 index rose 0.4 percent to 8,644.19 as investors bargain-hunted for blue chip shares. Nissan Motor Corp. shot up 4.4 percent and Mazda Motor Corp. jumped 4.1 percent. Panasonic Corp. gained 3.7 percent.

Australia's S&P/ASX 200 was 1 percent higher at 4,044.50. South Korea's Kospi gained 0.4 percent to 1,743.23. Benchmarks in Taiwan, mainland China, Malaysia and Indonesia also gained.

But Hong Kong's Hang Seng sank 0.9 percent to 17,967.31 and benchmarks in Singapore and Thailand also fell.

Worries about Europe have weighed on stock markets for months, and any glimmer of positive action tends to spark buying.

"Whenever there is a bit of a sense that there will be some credible action, in Europe in particular, then investors are pretty trigger happy on not wanting to miss out," said Ric Spooner, chief market analyst at CMC Markets in Sydney.

"At the end of the day, I think everybody is very conscious of the fact that things are far from certain."

Others cautioned that if a concrete rescue plan for debt laden Greece does not emerge soon, then stocks could head right back down.

"Every time the market gets its hopes up that a solution to the eurozone crisis is near the rug gets pulled from under it," Ben Potter, market strategist at IG Markets in Melbourne, said in a research note.

"Only when we see firm action being taken, rather than hollow promises will confidence and sentiment begin to improve."

Energy and mining stocks rose as fears dissipated of a financial blowup in Europe, which could drag down economic growth across the globe and reduce demand for raw materials such as crude oil and metals.

Japanese energy explorer Inpex Corp. rose 2.9 percent and Hong Kong-listed shares of PetroChina, the country's biggest oil and gas company, gained 1.6 percent. Newcrest Mining Ltd., Australia's largest gold miner, jumped 2.6 percent.

But shares of Shanghai Shentong Metro Group Co., operator of the Shanghai subways, slipped 1.4 percent, a day after a collision between two trains injured more than 270 passengers.

A default by Greece could ripple across the globe, threatening the solvency of European banks and other financial institutions that have large holdings of the country's bonds. A default could also hurt U.S. companies which send about 20 percent of their exports to Europe.

But investment sentiment was boosted late Tuesday, when Greek lawmakers passed a controversial property tax - one of a host of painful debt-reduction measures it must undertake in exchange for rescue loans. The country will go bankrupt unless it receives an (euro) 8 billion ($11 billion) rescue loan before mid-October.

Another encouraging sign of Europe's commitment to Athens came from German Chancellor Angela Merkel, who said her country would do whatever it could to help the debt-riddled Greece.

Those signals helped boost Wall Street stocks Tuesday. The Dow rose 1.3 percent to close at 11,190.69. The Standard & Poor's 500 index rose 1.1 percent to 1,175.38. The Nasdaq composite rose 1.2 percent to 2,546.83.

European markets also closed sharply higher. Germany's DAX vaulted 5.3 percent, France's CAC-40 soared 5.7 percent. Britain's FTSE 100 surged 4 percent.

In currency trading, the dollar fell to 76.54 yen from 76.75 yen late Tuesday in New York. The euro fell to $1.3572 from $1.3641.

Benchmark crude for November delivery was down $1.36 to $83.09 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $4.21 to close at $84.45 per barrel on Tuesday on the Nymex.