Asia markets rise on European debt talks

AFP/Tokyo

A man walks past a stock quotation board outside a brokerage in Tokyo yesterday. The Nikkei stock average closed up 1.90%, shrugging off further yen strength and hits to production from Thailand’s floods, after the weekend yielded signs of progress on a plan to contain the eurozone debt crisis

Asian shares surged yesterday after weekend meetings of European leaders resulted in “good progress” on tackling a regional debt crisis that has threatened to plunge the world economy into recession. The eurozone wants to beef up its €440bn ($610bn) rescue fund, the European Financial Stability Facility, to convince markets it has the means to protect highly indebted nations such as Italy and Greece. However, they announced few concrete details from the weekend meetings, vowing to reveal all at a second summit on Wednesday. Investors were also keeping an eye on the yen, which reached a record post-war high of 75.78 against the dollar on Friday.The surge prompted Japan’s finance minister to call for “decisive steps” to tame the currency’s rapid rise amid worries that a strong yen will hammer Japanese exports. or 165.09 points, higher at, 8,843.98, while Sydney jumped 2.73%, or 113.1 points, to 4,255 and Seoul rose 3.26%, or 59.94 points, to 1,898.32. Hong Kong climbed 4.14%, or 746.10 points, to end at 18,771.82 while Shanghai added 2.29%, or 53.06 points, to close on 2,370.30. Both markets were lifted by improved manufacturing data from China. Eurozone talks have been mired in debate over how to increase the rescue fund’s firepower without increasing the guarantees each state puts into the fund—a sensitive issue for richer nations such as Germany, which are tired of bailing out the eurozone’s weaker members. “The mood of trading is generally optimistic that eurozone policy makers will announce significant measures on Wednesday to bolster the bailout fund and resolve Greece’s debt crisis, while also supporting the region’s banks,” said IG Markets analyst Stan Shamu. However, some traders cast doubt on whether the talks would produce a concrete plan with investors taking a cautious short-term view of the markets. “Continuing uncertainty over how decisively European leaders could act is limiting trading volume,” Yumi Nishimura, senior market analyst at Daiwa Securities, told Dow Jones Newswires. Eurozone leaders are toying with the idea of asking China and other emerging powers to help them out of the debt crisis by taking part in the bailout fund, but some are reluctant to call in Beijing. The European Union is China’s largest trade partner. A reading above 50 indicates the sector is expanding, while a reading below 50 suggests a contraction. The final reading for October is due on November 1. In other markets; Singapore closed 1.79%, or 48.54 points, higher at 2,760.95; Taipei soared 2.97%, or 215.79 points, to 7,970.30; Manila gained 0.83%, or 34.48 points, to end at 4,201.08; Jakarta added 2.38%, or 86.12 points, to close at 3,706.78; Kuala Lumpur gained 0.78%, or 11.19 points, to close at 1,450.02 and Wellington and Bangkok are closed for public holidays.