Dawn News

Asian markets rise on hopes for ECB help

Trader at Tokyo Stock Exchange — File Photo
Trader at Tokyo Stock Exchange — File Photo

TOKYO: Stock markets were mixed Tuesday in Asia on renewed uncertainties over the European debt crisis, after a short-lived rally driven by the Chinese central bank's move to ease tight liquidity through open market operations.  
Japan's Nikkei 225 index traded in a narrow range, closing 0.2 per cent lower at 9,156.92, while South Korea's Kospi gave up early gains, losing 0.2 per cent to 1,943.22. Hong Kong's Hang Seng slipped marginally to 20,100.09, while Australia's S&P/ASX 200 added 0.4 per cent to 4,383.40.

Benchmarks rose in Singapore, Taiwan and mainland China, where the central bank's move to ease funding shortages through money market operations offset disappointment over dashed hopes for an interest rate cut.

The slimness of the gains suggests the market could take a turn for the worse in coming days, said Linus Yip, a strategist with Shanghai Securities in Hong Kong.

''We are going into a critical time window,'' Yip said. ''The momentum is not good enough to push the market to a higher level. The diminishing turnover suggests a retrenchment may be coming.''

Early gains were supported by lingering hopes that the European Central Bank might buy bonds to help some European countries reduce their borrowing costs. But such speculation has been countered by denials by ECB officials of such plans, and signs from Germany that it opposes such moves.

Investors are watching Greek Prime Minister Antonis Samaras' visit this week to Germany and France, where he is expected to request an extension of Greece's deadline to meet fiscal targets as the country carries out painful reforms. Luxembourg Prime Minister Jean-Claude Juncker, who chairs the eurozone finance ministers' meetings, will be in Athens on Wednesday to meet Samaras.

In China, the Shanghai Composite Index jumped 0.6 per cent to 2,119.72 following reports Chongqing, a huge metropolis in southwestern China, plans to spend 1.7 trillion yuan to upgrade its manufacturing sector.

Among individual stocks, Hong Kong-listed CNOOC Ltd., China's biggest offshore oil and gas producer, tumbled three per cent after saying first-half profit fell 19 per cent due to rising costs and a drop in production from an oil spill.

In Japan, heavy equipment makers fell. Hitachi Construction Machinery lost three per cent and Komatsu Ltd fell 2.8 per cent.

Crude oil rose 58 cents to $96.55 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 4 cents to $95.97 per barrel in New York on Monday.

In currencies, the euro was trading at $1.2414, up from $1.2348 late Monday in New York. The dollar rose slightly to 79.44 yen from 79.43 yen.

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