Asia stocks up after Spain pledges to cut spending

AP News
Posted: Sep 27, 2012 10:58 PM
Asia stocks up after Spain pledges to cut spending

BANGKOK (AP) — Asian stock markets rose Friday after Spain announced severe budget cuts meant to show international lenders and investors that the country is making progress toward getting its debt under control.

The Spanish government on Thursday unveiled a draft budget for 2013 that cuts overall spending by €40 billion ($51 billion). Wall Street spurted higher on the news.

Stocks were also helped by speculation that China's central bank will act soon to help the world's No. 2 economy.

Hong Kong's Hang Seng Index rose 0.3 percent to 20,825.01. South Korea's Kospi added nearly 0.3 percent to 1,993.44 and Australia's S&P/ASX 200 gained 0.1 percent to 4,388.90.

But Japan's Nikkei 225 index lost 0.3 percent to 8,919.44, sinking on a government report that showed industrial production fell a further 1.3 percent in August.

Weak global and domestic demand is weighing on manufacturers, particularly electronics makers, who are facing intense competition from South Korean, Taiwanese and other Asian manufacturers. The strong yen, which erodes overseas earnings and makes Japanese-made products relatively more expensive, is also eating into profits.

Wall Street stocks posted their first gain of the week, despite mixed data on the U.S. economy.

The Dow Jones industrial average rose 0.5 percent to 13,485.97. The S&P 500 index rose 1 percent to 1,447.15. The Nasdaq composite index rose 1.4 percent to 3,136.60.

The U.S. government said the overall economy grew at a slower annual rate in the April-through-June quarter than it previously estimated. Companies cut orders for durable goods last month. But the number of Americans seeking unemployment benefits fell.

Benchmark oil for November delivery was up 46 cents to $92.31 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.87 to finish at $91.85 on the Nymex on Thursday.

In currencies, the euro rose to $1.2936 from $1.2917 late Thursday in New York. The dollar fell to 77.52 yen from 77.62 yen.