Asian stocks rise on hopes strong regional GDP growth can withstand Europe debt crisis

By Alex Kennedy, AP
Thursday, May 27, 2010

Asian stocks rise as traders eye strong GDP growth

SINGAPORE — Asian stock markets rose Thursday on optimism that strong regional economic growth will likely withstand financial turmoil in Europe.

Oil prices, meanwhile, headed to $72 a barrel and the shaky euro recouped some losses against the dollar. This month, Asian countries including China, Japan, Singapore, Taiwan and Malaysia have reported robust economic figures, raising hopes the region can absorb any downturn in Europe.

Japan’s Nikkei 225 stock average rose 1 percent to 9,621.69 while South Korea’s Kospi jumped 1.7 percent to 1,609.31. Australia’s S&P/ASX 200 index was gained 1.1 percent to 4,354.70.

Hong Kong’s Hang Seng added 0.8 percent to 19,340.27 and benchmarks in Singapore, India, Thailand and Malaysia all rose less than 1 percent.

“Despite the turmoil in financial markets, the near-term outlook for the world economy is brighter than a few months ago,” Capital Economics said in a report. “In many countries, the mood in the markets is much gloomier than the latest economic data and surveys of business and consumer confidence would suggest.”

Capital Economics said it raised its 2010 global gross domestic product growth forecast to 4.5 percent from 4.0 percent.

The Dow Jones industrial average lost 69.30 points, or 0.7 percent, to 9,974.45 Wednesday, closing below 10,000 for the first time since Feb. 8 on fears that Europe’s fiscal crisis could cause a slowdown in the global economy.

A Financial Times report that China is reviewing its holdings of European government bonds due to the debt crisis also sparked selling of the euro. China holds the world’s largest foreign reserves.

The euro is hovering around a four-year low against the dollar, and its slide has become a symbol of waning confidence in Europe’s ability to contain its debt problems.

In currencies, the dollar edged up to 90.16 yen in Tokyo from 89.84 yen in New York late Wednesday. The euro climbed to $1.2257 from $1.2156.

Benchmark crude for July delivery was up 22 cents to $71.72 a barrel in electronic trading on the New York Mercantile Exchange. The contract added $2.76 to settle at $71.51 on Wednesday.

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