×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

Asian markets rise as Italy vows debt crisis plan

Asian markets rise as Italy vows debt crisis plan
Comment E-mail Print Share
First Published: Mon, Nov 14 2011. 12 44 PM IST

Updated: Mon, Nov 14 2011. 12 44 PM IST
Hong Kong: Asian markets rose Monday as Italy’s new leader vowed to pull the debt-laden country back from the brink of a fiscal disaster that has threatened to tear apart the eurozone.
Former European Union Commissioner Mario Monti was nominated Sunday to replace Silvio Berlusconi as prime minister and pledged to get to work on tackling a crippling debt crisis in the eurozone’s third-largest economy.
Tokyo ended 1.05% higher, adding 89.23 points, to 8,603.70, while Sydney gained 0.19%, or 8.1 points, to 4,304.6 and Seoul climbed 2.11%, or 39.36 points, to 1,902.81.
Hong Kong gained 2.18% in the afternoon and Shanghai was 1.86% higher.
The euro climbed against the dollar on the back of the political shuffle with Monti’s formal appointment expected within days.
The single currency also got a boost as debt-laden Greece ushers in a new government headed by the European Central Bank’s ex-deputy chief Lucas Papademos under a power-sharing deal between the country’s main rival parties.
“Investors are thinking these political developments will help Europe find a way out of its debt crisis,” said Peter Copeland, senior institutional trader with Sydney-based brokerage BBY.
“(But) a lot of people will see these developments as just kicking the can down the road.”
Italian lawmakers on Saturday approved a package of economic reforms that Berlusconi set as the precondition for his resignation amid global market turmoil.
Investors have been nervous for months as worries mounted over Greece’s accounts while Italy’s borrowing costs soared amid worries it would be the next eurozone country to collapse under a mountain of debt.
The European Union, which together with the International Monetary Fund is auditing Italy’s accounts, said it would monitor Rome’s reforms and that the country may need to pass extra austerity measures to tackle a staggering €1.9 trillion ($2.6 trillion) debt.
“Markets are likely to be cautious in their enthusiasm for the new governments at this stage,” Ric Spooner, chief markets analyst at CMC Markets in Sydney, told Dow Jones Newswires.
“Both have a fragile hold on political power and their capacity to implement the kinds of reform needed to restore market confidence is yet to be tested.”
Asian markets also reacted to Japanese government data showing the country’s economy grew by 6% in the July-September quarter, the first gain since March’s earthquake and tsunami disaster.
In Tokyo, Olympus -- which is embroiled in a loss-covering scandal -- surged more than 17% as concerns eased that it would be delisted after the firm said it would file its earnings results by a 14 December deadline.
The stock exchange has warned it will be taken off the index if it does not file by the date.
US markets rose Friday on growing optimism over Europe’s debt problems, with the Dow Jones Industrial Average closing 2.18% higher.
The broad-based S&P 500 added 1.95% while the tech-heavy Nasdaq Composite gained 2.04%.
Traders will be keeping a close eye on key US economic figures due to be released this week, including October retail sales and housing starts.
On currency markets, the euro stood at $1.3750 in Tokyo trade, up from $1.3739 in New York late Friday. It also firmed to ¥106.05 from ¥105.97.
The dollar was barely changed at ¥77.10 compared to ¥77.12.
New York’s main oil contract, light sweet crude for December delivery, gained 16 cents to $99.15 a barrel and Brent North Sea crude, also for December, was 44 cents higher at $114.60.
• • •
Comment E-mail Print Share
First Published: Mon, Nov 14 2011. 12 44 PM IST
More Topics: Markets update | Asia | Wall Street | Oil | Dow Jones |