Asian stocks push higher as ECB hopes build

AP News
Posted: Jul 31, 2012 12:39 AM
Asian stocks push higher as ECB hopes build

Hong Kong (AP) — Asian stocks pushed higher on Tuesday as expectations continued to build that European policymakers will unleash powerful measures to battle the continent's debt crisis.

Japan's Nikkei 225 stock average rose 0.6 percent to 8,691.60 and Hong Kong's Hang Seng gained 0.8 percent to 19,748.73. South Korea's Kospi rose 1.4 percent to 1,868.92 while Australia's S&P/ASX 200 climbed 0.8 percent to 4,280.00. Benchmarks in Taiwan, Thailand, Indonesia and New Zealand also rose.

Investors are pinning their hopes on a European Central Bank meeting later this week where many expect ECB President Mario Draghi to announce big plans to support the euro, following his comments last week that the bank is "ready to do what it takes" to save the beleaguered currency. Spain's borrowing costs have surged, raising the risk that one of Europe's biggest economies will need a potentially unaffordable bailout that would strain the euro currency union.

"It's all about the ECB at the moment," strategist Stan Shamu of IG Markets in Melbourne, said in a commentary. "Mr Draghi has made people believe we will see a strong policy response to the rise in peripheral European bond yields," Shamu said. He cautioned that the chances of investors being disappointed following Thursday's meeting are very high.

China's Shanghai Composite edged 0.1 percent lower to 2,107.25 as investors appeared unimpressed by a government announcement the day before that it will launch projects to attract private investments in energy, health and other industry sectors in an attempt to reverse an economic slump.

U.S. Federal Reserve policymakers are also meeting this week, adding to hopes of more monetary stimulus for the world's biggest economy.

On Wall Street on Monday, U.S. stocks fell as investors took a more wary approach, waiting for action from Europe's leaders to follow their talk. The Dow Jones industrial average fell less than 0.1 percent to close at 13,073.01. The broader Standard & Poor's 500 also edged down less than 0.1 percent to 1,385.30, while the Nasdaq dropped 0.4 percent to 2,945.84.

In currencies, the euro rose to $1.2289 from $1.2261 in late trading Monday. The dollar weakened to 78.19 Japanese yen from 78.21 yen.

Oil prices rose. Benchmark crude for September delivery was up 21 cents to 89.99 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 35 cents to $89.78 on Monday. In London, Brent crude was up 10 cents at $106.30 on the ICE Futures exchange.