Asia stocks rise amid hopes for central bank help

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Asia stocks rise amid hopes for central bank help

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Stocks rose amid hopes that central banks in U.S. were gearing up for action to sustain economy.

15 June,2012 09:24 am

Asian markets were mostly up on Friday amid hopes that the US Federal Reserve will embark on a fresh round of economic stimulus and Greece will return a pro-austerity government in weekend polls.However, with Spains borrowing costs hitting another record high despite a $125 billion bank bailout, traders remain on edge.Tokyo shares rose 0.14 percent, Hong Kong climbed 0.62 percent, Sydney advanced 0.10 percent and Shanghai was 0.38 percent higher but Seoul slipped 0.95 percent.In the United States weekly initial jobless claims rose more than expected. Consumer prices fell in May for the first time in two years, driven by falling gasoline prices, but core inflation rose 0.2 percent for the third straight month.The numbers sparked speculation that the US central bank would start a third round of stimulus known as quantitative easing in a bid to kickstart the worlds biggest economy.Hopes for more easing steps bolstered risk appetite in New York, said Takashi Hiroki, Monex Inc. chief strategist in Tokyo. Market sentiment is brighter, he told Dow Jones Newswires.On Wall Street the three main indexes advanced on hopes for more cash flooding into the market. The Dow gained 1.24 percent, the S&P 500 climbed 1.08 percent and the Nasdaq added 0.63 percent.Sentiment seemed to strengthen on hopes that underwhelming data might compel the Fed to implement another round of quantitative easing when they meet next week, said Briefing.com.In Britain finance chief George Osborne and Bank of England governor Mervyn King said they would flood banks with cheap funds in a bid to jump-start lending to households and businesses and to fend off a potential storm from Europe.But while investors absorbed the possibility of fresh cash in the system Europes troubles tempered sentiment.On Thursday the interest rate on Spanish 10-year government bonds soared to 6.9650 percent, the highest since the birth of the single currency in 1999, and close to the danger-zone 7.0 percent considered unsustainable to service debts.The hike came after Moodys on Wednesday slashed Spains sovereign debt rating by three notches, saying the bank bailout would put extra strain on the countrys already weak finances.Greek shares soared more than 10 percent on speculation that voters would elect a government committed to austerity policies key to the country receiving further bailout aid and staying in the euro.The surge comes just days ahead of Sundays vote, which was called after an inconclusive poll at the start of May that sent shockwaves through global markets amid fears a Greek euro exit would have calamitous knock-on effects.On currency markets the euro bought $1.2620 and 100.31 yen, compared with $1.2630 and 100.21 yen in New York late Thursday.The dollar stood at 79.47 yen, up from 79.34 yen.And the Australian dollar rose back above parity with the greenback, trading at US$1.0018, up from US$0.9948 on Thursday, having fallen in recent weeks.New Yorks main contract, light sweet crude for delivery in July, was up 37 cents to $84.28 a barrel and Brent North Sea crude for August delivery gained 57 cents to $97.74.Gold was worth $1,623.80 an ounce at 0130 GMT, compared with $1,620.10 late Thursday.