Asia stocks up on hopes for Europe debt crisis fix
BANGKOK (AP) — Asian stocks rose Wednesday amid growing optimism that European leaders will approve aggressive plans by the end of the week to rescue the region from a debt crisis that has roiled financial markets for months.
Benchmark oil rose above $101 per barrel, while the dollar fell against the euro but gained against the yen.
Japan's Nikkei 225 rose 1.2 percent to 8,676.67 and South Korea's Kospi added 0.6 percent to 1,913.50. Hong Kong's Hang Seng gained 0.9 percent to 19,117.53. Australia's S&P/ASX 200 climbed 0.6 percent to 4,288.70. Benchmarks in mainland China, Singapore, Taiwan and Indonesia also rose. Malaysia and New Zealand fell.
On Wall Street, stocks mostly rose Tuesday on a report that European leaders might create a second bailout fund to supplement the one they have already agreed to. The second fund would nearly double the capacity of Europe's financial rescue programs, the Financial Times reported.
The plan involves allowing the existing 440 billion euros bailout fund to continue running when a new 500 billion euros facility comes into force in mid-2012, almost doubling the rescue system's firepower, Stan Shamu of IG Markets wrote in a report. "This latest move might just be the 'bazooka' Europe needs to appease markets."
Shares of camera and medical equipment maker Olympus fell 6.9 percent in Tokyo, a day after an independent panel determined that the company had falsified accounting records to cover up huge investment losses from the 1990s. The company risks being removed from the Tokyo Stock Exchange.
But other Japanese exporters posted solid gains. Sony Corp. jumped 5 percent and Ricoh Co. climbed 3 percent.
Japanese shipper Mitsui O.S.K. Lines surged 8.5 percent after an agreement with four other tanker owners to jointly operate very large crude carriers known as VLCCs starting early next year, Kyodo News Agency reported.
In Australia, markets were helped by data showing the economy grew by 1 percent in the September quarter. An interest rate cut by the Reserve Bank of Australia on Tuesday, which raised hopes of more consumer spending, helped retail shares. Woolworths rose 1.8 percent and surfwear maker Billabong International gained 3.1 percent.
Trading volume was light in Hong Kong, where a slew of IPOs devoured much of the available investment funds and sentiment leaned toward caution as the end of the year approaches.
"I think a lot of people, a lot of funds, have effectively closed their books for the year and are trying to protect the gains that they made, and also a lot of retail money is tied up in IPOs, so it makes for thin trading," said Andrew Sullivan, principal sales trader at Piper Jaffray in Hong Kong.
Asian stocks tumbled Tuesday, hours after Standard & Poor's credit ratings agency warned that it might downgrade 15 of the 17 countries that use the euro — even Germany, which has a top AAA rating and Europe's strongest economy.
On Tuesday, S&P said it might also cut the AAA rating of Europe's bailout fund. The fund needs that top rating to cheaply raise money, and losing it would mean it would cost billions more to fund bailouts.
Hopes that Europe was finally serious about taming its debt crisis boosted U.S. stocks Tuesday. The Dow Jones industrial average closed up 0.4 percent at 12,150.13. The Standard & Poor's 500 index closed up 0.1 percent to 1,258.47. The Nasdaq composite average closed down 0.2 percent at 2,649.56.
Benchmark crude for January delivery was up 17 cents to $101.44 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 29 cents to settle at $101.28 on Tuesday.
In currency trading, the euro rose to $1.3419 from $1.3414 late Tuesday in New York. The dollar rose to 77.72 yen from 77.70 yen.
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