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Asian shares rise, euro steady ahead of meeting

Asian shares rise, euro steady ahead of meeting
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First Published: Tue, Aug 16 2011. 09 04 AM IST
Updated: Tue, Aug 16 2011. 09 04 AM IST
Singapore:Asian stock markets rose on Tuesday after Wall Street shares climbed for a third straight session, while the euro steadied as traders awaited talks between leaders of France and Germany on what further measures they can take to contain Europe’s debt crisis.
Some in the market hope the meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel at 7:30pm, on Tuesday will light a path out of the euro zone’s debt troubles, but many believe optimism over the way ahead is overdone.
The German government sees no major breakthrough at the Paris talks, a spokesman said on Monday, while the French president’s office said the creation of common euro zone bonds will not be on the agenda.
“Sovereign debt concerns remain a persistent negative for the (euro), as the EU’s latest attempt at delivering a comprehensive solution to the region’s vulnerabilities has disappointed investors,” analysts at Standard Chartered said in a research note.
The euro held steady at $1.4436 , just below a three-week high against the dollar, after rising 1.4% on Monday ahead of the summit.
Japan’s Nikkei was up 0.3% while MSCI’s index of Asia ex-Japan stocks rose 1%, largely as Korean shares caught up to regional gains on Monday, when Seoul markets were closed for a holiday.
Still, US S&P futures dipped 0.3%, curbing broader Asian gains.
Many experts say the only way to ensure affordable financing for the euro zone’s most struggling, debt-laden countries would be for the bloc to issue joint eurobonds.
But even if a common euro zone bond were issued, it would not end the euro zone’s debt woes at a stroke.
“There still hasn’t been debate about just how much issuance would be possible and just how much issuance the German public would be okay with,” said Makoto Noji, senior bond and currency strategist for SMBC Nikko Securities in Tokyo.
On Tuesday, World Bank President Robert Zoellick said national governments should seek a long-term fix for the sovereign debt crises in Europe and the United States, but added it was too early for special action by the Group of 20 rich nations.
Against the yen, the dollar traded around 76.80 , down from more than ¥80 earlier in August.
Asian shares drew succour on Tuesday from news that Google has offered to buy Motorola Mobility Holdings Inc for about $12.5 billion. The deal helped push up major Wall Street indexes by as much as 2.2%.
The MSCI Asia ex-Japan index had lost around 14% over the past two weeks, part of a global market rout in which billions of dollars were wiped off share indexes.
The S&P 500 last week hit its lowest in nearly a year after the first-ever downgrade of US sovereign credit ratings, but have since rebounded almost as sharply.
The risk of a new US recession has risen over the last couple of months, but an outright contraction will most likely be avoided Atlanta Federal Reserve Bank President Dennis Lockhart said on Monday.
Gold , seen by many as a safe store of value in turbulent financial markets, is one of the best-performing assets this year. It traded at $1,762 per ounce on Tuesday, down a touch from Monday’s close and around $50 off its peak.
US crude oil futures slipped 44 cents to $87.44 per barrel after a $2 rise on Monday.
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First Published: Tue, Aug 16 2011. 09 04 AM IST
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