Asia stocks up modestly ahead of Chinese holiday

AP News
Posted: Sep 26, 2012 11:03 PM
Asia stocks up modestly ahead of Chinese holiday

BANGKOK (AP) — Most Asian stocks etched modest gains Thursday, driven higher as investors positioned themselves ahead of major holiday that will shut markets in Hong Kong and mainland China next week.

Speculation that China's central bank might enact policy changes during the holidays to help jumpstart the world's No. 2 economy gave sentiment a slightly positive bias.

Hong Kong's Hang Seng rose 0.6 percent to 20,649.68 and mainland China's Shanghai Composite Index gained 0.5 percent to 2,014.77. South Korea's Kospi rose 0.2 percent to 1,984.26. Benchmarks in Singapore, Taiwan and Indonesia also rose.

But Japan's Nikkei 225 fell marginally to 8,903.66 a day before the release of key economic data for August. Analysts at DBS Bank Ltd. in Singapore said industrial production for Japan is expected to contract and retail sales growth will likely stay negative.

"Global demand conditions have remained weak and the outlook is subdued and uncertain. Adding to this is the recent escalation of China-Japan tensions, which could lead to further deterioration in export demand from China in the short term," DBS said in a market commentary.

Violent protests on the streets of Athens and Madrid sent stocks sharply lower on Wednesday, reigniting concerns over Europe's ability to implement the measures needed to deal with its big debts.

The latest turmoil to afflict the euro common currency shared by 17 nations began late Tuesday, when clashes broke out at a demonstration in Madrid that was protesting new austerity measures from the Spanish government. That was followed Wednesday by a general strike in Greece, which also turned violent.

Stan Shamu of IG Markets in Melbourne, Australia said that "the situation in Europe is likely to keep many market participants cautious as we approach the end of the quarter."

On Wall Street, a mixed report about the housing market and the Europe unrest extended the longest losing streak for the Standard & Poor's 500 index since mid-July. The S&P 500 index fell 0.6 percent to 1,433.32.

The Dow Jones industrial average fell 0.3 percent to 13,413.51. The Nasdaq composite average fell 0.8 percent to 3,093.70.

Benchmark oil for November delivery was up 34 cents to $90.32 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.39 to finish at $89.98 per barrel on the Nymex on Wednesday.

In currencies, the euro rose to $1.2875 from $1.2859 late Wednesday in New York. The dollar fell to 77.68 yen from 77.72 yen.