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Asian shares mostly higher despite Spain downgrade

Asian shares mostly higher despite Spain downgrade
AP
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First Published: Mon, May 31 2010. 11 24 AM IST
Updated: Mon, May 31 2010. 11 24 AM IST
Bangkok: Asian stock markets were mostly higher Monday as investors shrugged off more sobering news about Europe’s shaky finances amid new signs Asia’s economies are continuing to recover.
Oil, meanwhile, rose above $74 a barrel, and the dollar gained against the yen and weakened against the euro.
On Friday, the Dow Jones industrials shed 1.2% to 10,136.63 after Fitch Ratings gave Spain the second downgrade of its credit rating in a month. The rating agency’s action gave investors another reminder of the long-term economic problems still facing debt-laden European countries.
The news, however, did not come as a shock to investors in Asia, where expectations of a downgrade of Spain had been circulating for some time. Markets in Asia were mixed in early trade and then mostly headed higher.
“Asians were prepared for the downgrade for Spain,” said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong. “So Asian markets are quite stable today. Even Bangkok is up.”
Jackson Wong, investment manager at Tanrich Securities in Hong Kong, also said he viewed Asia as stabilizing, despite some investor nervousness. “The momentum is still on the positive side,” Wong said.
Japan’s Nikkei 225 stock average was up 45.13 points, or 0.5%, to 9,806.24 amid news that industrial production in the world’s No. 2 economy rose for a second straight month in April, propelled by robust growth in China and the rest of Asia.
South Korea’s Kospi rose 0.8% to 1,635.66 and Taiwan’s benchmark added 0.7% to 7,349.65.
Australia’s S&P/ASX 200 fell 0.3% to 4,447.9 and Hong Kong’s Hang Seng was little changed at 19,763.98.
In Seoul, Ssangyong Motor Co. surged more than 14% after several companies, including India’s Mahindra & Mahindra Ltd., expressed interest in buying the troubled SUV maker.
Still, concerns about a possible slowdown in global demand hit big commodity names. Japanese trading house Mitsubishi Corp. lost 0.6 percent and Australian miner BHP Billiton Ltd. fell 1.2%.
Japanese exporters gained as the yen weakened. Canon Inc. rose 1.2%, and Nissan Motor Co. advanced 1.1%.
The S&P 500 index fell 1.2% in New York on Friday, while the Nasdaq composite index dropped 0.9%.
Charles Plosser, president of the Federal Reserve Bank of Philadelphia, said Monday that the outlook for the United States was still good and that he does not expect a double dip recession.
“Our growth prospects remain positive,” he told reporters in Seoul, where he was participating in a conference sponsored by South Korea’s central bank. “But obviously, the financial turmoil in Europe raises some clouds on the horizon that we have to be cautious about.”
US financial markets will be closed Monday for Memorial Day.
In currencies, the dollar rose to 91.54 yen from ¥91.02 late Friday. The euro rose to $1.2318 from $1.2272, a bump upward that may stem from the overselling of euros last week.
Crude oil for July delivery was up 55 cents at $74.52 in electronic trading on the New York Mercantile Exchange.
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First Published: Mon, May 31 2010. 11 24 AM IST
More Topics: Markets | Asia | Nikkei | Hang Seng | Europe |