BANGKOK (AP) — Asian stock markets advanced Tuesday as investors took heart from strong consumer spending in the U.S. and a deal to combine two major banks in debt-stricken Greece.
Oil prices hovered above $87 a barrel in Asia while the dollar weakened against the yen and the euro.
The Nikkei 225 index in Tokyo added 1.3 percent to 8,965.31 as investors seized on the positive U.S. figures and overlooked a rise in Japan’s unemployment rate.
Hong Kong’s Hang Seng gained 2.2 percent to 20,305.99 and South Korea’s Kospi was 0.8 percent higher at 1,844.37. Australia’s SP/ASX 200 rose 0.2 percent to 4,272.90.
Signs that the U.S. may be staving off another recession helped exporters that depend heavily on demand from the West. Sharp Corp. rose 2.9 percent and Panasonic Corp. was 3 percent higher. Isuzu Motor Corp. was 3.4 percent higher.
One sign of possible help on the horizon was the Federal Reserve’s decision to extend its upcoming policy meeting to two days instead of one. That raised the possibility of action, at least in the eyes of traders, to jolt the economy.
Another reason for the upbeat mood: investors were anticipating an announcement next week by President Barack Obama on a new jobs initiative.
“I think the focus is on President Obama’s speech, which is related to measures that will revive the economy,” said Kwong Man Bun, chief operating officer at KGI Securities in Hong Kong. “All this provides some of sort positive expectations for investors.”
European shares jumped Monday after Greece’s second- and third-largest lenders agreed to combine, creating the country’s largest bank. Greece’s government and central bank have been urging banks to merge, saying it would help them survive.
In the U.S. on Monday, stocks rose broadly after it became clear that Tropical Storm Irene had caused far less damage than many had feared. Insurance shares rose sharply as analysts lowered their estimates of how much damage the storm would cause.
An increase in consumer spending also helped to push stocks higher. The government reported that spending rose 0.8 percent in July. It was a sharp turnaround from June, when Americans cut spending 0.1 percent, the first decline in 20 months.
The Dow Jones industrial average rose 2.3 percent to close at 11,539.25. The Standard Poor’s 500 index rose 2.8 percent to 1,210.08. The widely used market benchmark is now up 8.1 percent since Aug. 8, when it hit low for the year because of a downgrade of the U.S. government’s credit rating. The technology-focused Nasdaq rose 3.3 percent to 2,562.11.
Despite Monday’s gains, analysts warned market sentiment will remain fragile ahead of U.S. economic indicators this week that could show slowing growth. Later Tuesday, the Consumer Confidence Index for August will be released. Then on Friday, the Labor Department will release U.S. employment data for August.
“The perception that stocks are more cheaply valued has helped to feed into appetite for equity markets. However, likely weak data in the days ahead both in the US and Europe may result in a reality check for markets,” Credit Agricole CIB said in a research note.
In currencies, the euro rose $1.4515 from $1.4505 late Monday in New York. The dollar slipped to 76.83 yen from 76.95 yen.
Benchmark oil for October delivery rose 23 cents to $87.50 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.90 to end at $87.27 per barrel on the Nymex on Monday.
In London, Brent crude for October delivery was up 26 cents to $112.14 on the ICE Futures exchange.
Article source: http://www.nytimes.com/aponline/2011/08/29/business/AP-World-Markets.html?partner=rss&emc=rss
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