Sunday, July 15, 2012

Asia markets rise on Wall Street rally

HONG KONG - Asian shares were broadly higher Monday on the back of a strong Wall Street rally and after Chinese data Friday eased overseas concerns over slowing growth in the world's second-largest economy.

Hong Kong's benchmark Hang Seng index was up 0.21 percent to 19,132.46 in mid-morning trade, Sydney jumped 0.75 percent to 4,112.7 with resource stocks leading the way, and Seoul rose 0.18 percent to 1,815.91.

But Shanghai was down 1.20 percent to 2,159.69.

Tokyo was closed for a public holiday.

Official data released Friday showed the Chinese economy expanded 7.6 percent in the second quarter year-on-year, its slowest pace for more than three years due to ripples from the eurozone debt crisis and slow US recovery.

Premier Wen Jiabao warned Sunday that while there was "a lot of dynamism and momentum for economic growth", China's "economic rebound is not yet stable and economic hardship may continue for a period of time".

In the depths of the global financial crisis at the start of 2009 China's economy grew at a rate of 6.6 percent.
Beijing's full-year growth target is 7.5 percent.

In New York Friday, US stocks broke a six-day losing streak on the back of better-than-expected figures from banking giant JP Morgan Chase, despite the firm revealing $5.8 billion in losses at its London derivatives operation.

The Dow closed up 1.62 percent, or 203.82 points, at 12,777.09, the S&P 500 rose 1.65 percent and the tech-rich Nasdaq 1.48 percent.

Despite the evidence of slowing Chinese growth, Justin Harper, market strategist for IG Markets Singapore, told AFP: "The Chinese GDP data... came better than expected."

JP Morgan's figures, he added, sparked hopes of "a better than expected earnings season across the board for the big banks".

Traders were also looking to US Congressional testimony from Federal Reserve chairman Ben Bernanke on Tuesday and Wednesday for any hint on a third round of quantitative easing, DBS Group Research said in a report.

"As far as the market is concerned, it is a question of 'not if, but when' the Fed will move towards a third round of quantitative easing measures or QE3," the report said.

The US is China's biggest trading partner and on currency markets the dollar advanced against the euro, with the single currency fetching $1.2241 in morning Asian trade compared to $1.2248 in New York on Friday.
The euro also slipped against Japan's currency, buying 96.79 yen from 97.08 yen. The US dollar traded at 79.06 yen from 79.17 yen.

Oil was down in Asian trade Monday with New York's main contract, light sweet crude for August delivery, shedding 37 cents to $86.73 a barrel, and Brent North Sea crude for delivery in August retreating five cents to $102.35.

Gold was worth $1,588.10 an ounce at 0340 GMT, compared with $1,583.22 on Friday.

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