Asia stocks gain but China economy caution lingers
- Article by: KAY JOHNSON
- AP Business Writer
- July 8, 2013 - 10:45 PM
BANGKOK — Asian stock markets rebounded Tuesday, joining a global rally following positive U.S. economic news as nervousness about an imminent scaling back of the Federal Reserve's monetary stimulus eased.
The regional heavyweight, Japan's Nikkei 225 index, rose 1.2 percent to 14,272.32 and Australia's S&P/ASX 200 was up 1.3 percent to 4,8673.10.
The move higher came a day after concerns over a sustained China slowdown prompted a selloff in Asia.
Other regional markets rose only moderately, reflecting continued caution. South Korea's Kospi inched up 0.4 percent to 1,824.58 and Taiwan's Taiex rose 0.7 percent to 7,942.66. Hong Kong's Hang Seng added 0.3 percent to 20,636.56.
Chinese stocks continued to be weighed down by a credit crunch, with the Shanghai Composite dipping 0.3 percent to 1,952.07. Indonesian stocks also dropped with the benchmark down by 0.4 percent to 4,417.60.
The overall Asian gains followed the lead of investors in Europe and the United States.
Wall Street has been buoyed by stronger-than-expected U.S. hiring figures released Friday that suggested the world's biggest economy is on a firm footing. The strong jobs growth has outweighed jitters about the prospect that the Fed will soon start winding down its unprecedented support for the economy
In the U.S., the Dow Jones Industrial Average rose 0.6 percent to close at 15,224.69. The Standard & Poor's 500 gained 0.5 percent to end at 1,640.46.
European markets started the week positively with the FTSE 100 index of leading British shares closing up 0.4 percent at 6,450.07. Meanwhile, Germany's DAX rose 2.1 percent to 7,968.54 and the CAC-40 in France was 1.9 percent higher at 3,823.83.
Given the prevailing focus on the U.S., the key day this week will likely be Wednesday, when the minutes of the last policy meeting of the Fed are published. The Fed's chairman, Ben Bernanke, is also due to deliver a speech.
"It is possible that the combination of these events will encourage speculation that tapering is almost upon us," said Jane Foley, an analyst at Rabobank International, referring to the possibility of the Fed scaling back its $85 million of monthly bond purchases that have kept interest rates low.
"Alternatively there is the possibility that Bernanke will push back against speculation that the Fed is ready to take a less accommodative position."
Benchmark crude for August delivery was down 18 cents to $102.96 a barrel in electronic trading on the New York Mercantile Exchange, giving up some of its recent gains after worries over Egypt's political crisis pushed the price up $1.98 to $103.22 on Friday, the highest in more than a year.
Among major currencies, the euro was nearly flat at $1.2852 while the dollar rose to 101.03 yen from 100.90 yen.
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