Asian markets rise on US, Europe stimulus hopes

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Asian markets rise on US, Europe stimulus hopes

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Asian markets rose for a third successive day on Thursday.

07 June,2012 08:44 am

Asian markets rose for a third successive day on Thursday, posting strong gains on hopes for stimulus measures in the United States and Europe as well as promises of help for Spains banks.The euro also held up against the yen and dollar after impressive gains in New York late Wednesday, with dealers feeling a little more confident European leaders can navigate the long-running crisis.Tokyo was 1.26 percent higher by the break, Hong Kong rose 1.72 percent, Sydney was up 1.49 percent and Seoul soared 2.77 percent while Shanghai added 0.40 percent.Regional investors followed the lead of their counterparts in Europe and the United States.While a decision by the European Central Bank to keep rates on hold was disappointing, its head Mario Draghi said some governors on the policy committee had wanted a cut.He added that Wednesdays decision was taken by very broad consensus -- which analysts took to mean that there will be a reduction next month owing to the admission of dissent.The bank also said it would keep cash flowing to the 17-nation eurozones embattled banks, at least through year-end.On Spain, French Finance Minister Pierre Moscovici on Wednesday said the eurozone was ready to mobilise very rapidly to assist if Madrid requested it, slightly easing fears in the regions fourth largest economy.Spain has become a huge concern for the eurozone, with Germany against providing aid to Spain to help its banks without a bailout, and other states flexible on how to help Madrid without resorting to a full rescue.The likelihood of another round of stimulus in the United States rose again as the Fed looks to head off the effects of the European slump on the worlds number one economy.Dennis Lockhart, President of the Atlanta Federal Reserve, said the central bank might need to consider more easing if economic growth there hits more road blocks, days after another poor batch of jobs growth data.He said if domestic growth is no longer possible further monetary actions to support the recovery will certainly need to be considered, while the Fed rate-setting committee needs to be ready to respond to economic instability.The market is starting to price in additional policy response, and there is a greater expectation that something might happen before the Greek election (on June 17), Tim Schroeders, fund manager, at Pengana Capital in Australia, told Dow Jones Newswires.Eyes will now be on Fed Chairman Ben Bernankes testimony on the US economic outlook later in the day for clues to the banks response.Investors in Europe and New York welcomed the comments. On Wall Street the Dow surged 2.37 percent, the S&P 500 rose 2.30 percent and the Nasdaq climbed 2.40 percent.In Europe shares in London, Frankfurt, Paris and Madrid were all more than two percent higher.Amid concerns about the impact of Europes crisis on the US economy President Barack Obama called British, German and Italian leaders Wednesday to press the case for an immediate plan to find a resolution.The leaders agreed on the importance of steps to strengthen the resilience of the eurozone and growth in Europe and globally, White House spokesman Jay Carney said.On currency markets the euro eased slightly in early Asian trade after making healthy gains in New York on Wednesday.The common currency fetched $1.2574 and 99.68 yen in Tokyo, compared with $1.2580 and 99.63 yen in New York.It had been sitting at $1.2490 and 98.60 yen in Asia earlier on Wednesday.The dollar was at 79.27 yen Thursday, against 79.20 yen.Oil was also stronger. New Yorks main contract, light sweet crude for delivery in July, was up 20 cents to $85.22 a barrel and Brent North Sea crude for July delivery also gained 20 cents to $100.84.Gold was up at $1,620.20 an ounce at 0300 GMT, compared with $1,635.50 late Wednesday.