Asia stocks rise but weak SKorea data limits gains-A A +A
Thursday, July 26, 2012
BANGKOK — Asian stock markets rose Thursday amid hopes Europe will give its bailout fund more financial firepower but gains were tempered as South Korea reported its economic growth slowed to a two-year low.
Markets have been rattled over the past few days by fears that Spain, the fourth-largest economy among the 17 states that use the euro, could need a bailout along the lines of Greece, Ireland and Portugal.
Sentiment was given a boost by a suggestion from European Central Bank policymaker Ewald Nowotny that the European Stability Mechanism, the euro area's planned permanent bailout fund, could be given a banking license. That would give it the ability to borrow money from the ECB. Such a move would be of particular significant for Spain and Italy as the current bailout fund does not have enough money to rescue them both.
"We find it quite positive that the ECB seems to be at least thinking about these steps, although it is no way reflecting the wider central banks' opinion, as it is only his (Nowotny's) personal view. Mr Nowotny should be listened to though, as he is seen as a bit of a visionary within the bank," said IG Markets strategist Stan Shamu.
The advance in Asian markets was kept in check by more evidence of the toll that Europe's prolonged debt crisis is taking on the region. South Korea, Asia's fourth-largest economy, said economic growth slowed to a two-year low in the second quarter as weakness in Europe crimped demand from South Korea's biggest market China.
Japan's Nikkei 225 stock average was up 0.7 percent at 8,426.45 and Hong Kong's Hang Seng added 0.2 percent to 18,904.72. South Korea's Kospi gained 0.8 percent to 1,782.89. Australia's benchmark climbed 0.5 percent to 4,144.40 and the Shanghai Composite rose 0.3 percent to 2,142.24.
Wall Street was mixed on Wednesday as investors weighed earnings reports that ranged from good to bad.
The Standard & Poor's 500 slipped 0.42 points, or 0.03 percent, to end 1,337.89. The Dow Jones industrial average rose 58.73 points, or 0.5 percent, to 12,676.05. That snapped a three-day, triple-digit losing streak for the index.
In energy trading, benchmark crude for September delivery was down 38 cents at $88.59 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 47 cents on Wednesday in New York to end at $88.97.
The euro was little changed at $1.214. The dollar rose 0.1 percent to 78.15 yen. (AP)