Asian stocks rise ahead of German court ruling
BANGKOK (AP) — Asian stock markets rose Wednesday ahead of a court decision on whether Germany can support a European bailout fund created to prevent the weakest euro economies from going bust.
Confidence that the court won't block Germany's participation in the fund eased concerns generated by a warning from Moody's Investors Service that it may cut its credit rating for the United States.
The Moody's warning that it may downgrade its triple A score for the U.S. by one notch if progress isn't made next year on reducing the country's debt-to-GDP ratio had been widely-anticipated. Last year, the U.S. lost its top rating from the Standard & Poor's ratings agency. That caused markets to plunge.
Instead, investors focused on Wednesday's German court ruling on a request to block the country's approval of the eurozone's permanent bailout fund, the European Stability Mechanism, or ESM. A last-minute appeal to delay the decision was dismissed Tuesday.
"No one expects the German Constitutional Court to stand in the way of approving the European Stability Mechanism and Fiscal Compact today," said analysts at DBS Bank Ltd. in Singapore.
Japan's Nikkei 225 index rose 1.4 percent to 8,934.17. Hong Kong's Hang Seng added 1.1 percent to 20,074.18 and South Korea's Kospi gained 1.4 percent to 1,946.97.
Investors will also be keeping a close watch on developments in Athens as the Greek government meets its international debt inspectors. Greece has to convince them that it is abiding by the terms of its bailout agreement so it can get its next installment of rescue money needed to avoid a chaotic default on its debt.
Also Wednesday, Federal Reserve officials will gather for a two-day meeting. Many expect the Fed will announce a new effort to revive the sluggish economy Thursday afternoon. Some worry that the market could take a plunge if the Fed fails to deliver.
On Wall Street, the Dow Jones industrial average rose 0.5 percent to close at 13,323.36 on Tuesday. The Standard & Poor's 500 index rose 0.3 percent to 1,433.56. The Nasdaq composite index increased less than one point to 3,104.53.
Benchmark crude for October delivery was down 9 cents to $97.08 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 63 cents to finish at $97.17 on the Nymex on Tuesday.
In currency trading, the euro fell to $1.2858 from $1.2860 late Tuesday in New York. The dollar rose to 77.86 yen from 77.78 yen.