Asian stocks rise despite US declines

AP News
Posted: Jul 16, 2012 11:43 PM
Asian stocks rise despite US declines

BEIJING (AP) — Asian markets rose Tuesday amid optimism China might take new steps to stimulate its slowing economy.

Japan's Nikkei 225 gained 0.5 percent to 8,768.46, while China's benchmark Shanghai Composite Index rose 0.3 to 2,154.44. South Korea's Kospi added 0.8 percent to 1,831.79.

Expectations of possible Chinese stimulus measures rose after Premier Wen Jiabao's weekend promise of tax breaks and other aid to struggling small businesses. China's second-quarter growth fell to a three-year low of 7.6 percent but analysts said a rebound might be in sight.

"There is strong evidence suggesting that growth remains solid and its momentum is rebounding. Beijing is bound to do more to ensure that this continues," said Credit Agricole CIB economist Dariusz Kowalczyk in a report.

Elsewhere in Asia, Taiwan's Taiex rose 0.3 percent to 7,113.31 and Singapore's Straits Times Index gained 0.7 percent to 3,019.92. Sydney's S&P ASX 200 added 0.8 percent to 4,139.60.

Asian gains came despite overnight declines on Wall Street after weaker-than-expected June retail sales and the International Monetary Fund's decision to reduce its global growth forecast.

The U.S. Commerce Department said June retail sales suffered a third straight monthly decline, falling 0.5 percent. Forecasters had expected a 0.2 percent gain.

The Dow Jones Industrial Average and the Nasdaq market both lost 0.4 percent. The Standard & Poor's 500 shed 0.23 percent.

The IMF reduced its outlook for global growth to 3.5 percent from its April forecast of 3.6 percent. It cut growth forecasts for China, India and Brazil.

Worries about the U.S. economy have dominated markets, alongside Europe's debt crisis and China's cooling growth.

Investors are waiting for testimony Tuesday by Federal Reserve Chairman Ben Bernanke to Congress.

There have been expectations the Fed might loosen monetary policy to stimulate the sluggish U.S. recovery. But analysts say Bernanke is unlikely to foreshadow policy changes in his testimony.

Investors also are watching for details of Spain's bank bailout. This week, eurozone countries are expected to give Spain €30 billion as part of a larger bailout for its banks.

Benchmark crude for August delivery was up $1.49 at $88.65 in electronic trading on the New York Mercantile Exchange. The contract on Monday gained 9 cents to finish at $87.19 in New York.

In currency markets, the dollar rose to 78.9 yen while the euro gained 0.2 percent to $1.229.