Europe opens lower on banking worries, but Asian stock markets rise on good economic news

Asia stocks gain but Europe down on bank fears

MUMBAI, India — Asian markets gained Friday on better economic news from the U.S. and Japan, despite fresh concerns over the health of European banks, which dragged down Europe’s markets in early trading.

The FTSE 100 index of leading British shares slipped 0.3 percent to 5,477.06 — off Thursday’s four-month high. Germany’s DAX fell 0.4 percent to 6,195.36 while the CAC-40 in France shed 0.3 percent to 3,713.69.

Reports that Deutsche Bank, considered one of Europe’s strongest banks, may have to raise up to euro 9 billion to meet tough new banking rules being finalized in Basel rekindled worries about European debt and banks’ ability to handle defaults. Deutsche Bank shares slumped over 5 percent in early trading to 47.2 euro.

“For the Europe market, there is a concern about the banks,” said DBS Vickers director Peter Lai in Hong Kong. “The global economy is reviving, but the path is not smooth. There are still too many uncertainties and variables. The market will be swinging wildly.”

Wall Street, however, was set for slight gains with Dow futures up 5 points, or 0.1 percent, at 10.344.00 and broader S&P futures ahead by 1.6, or 0.2 percent, at 1,099.20.

Chinese markets reversed early losses as investors chased pharmaceutical, alternative energy, consumer goods and farming stocks — all areas the Chinese government is pledging to promote as it tries to deflate a property bubble without slowing economic growth, Lai said.

“The Chinese government is trying to suppress property prices,” he said. “Simultaneously, it didn’t want to impact GDP. That’s why they’re promoting other sectors.”

A slowdown in China’s export growth for August reflected unexpectedly weak orders by foreign retailers for the peak Christmas selling season, some analysts said, initially sending Chinese and Hong Kong stocks lower. But China’s imports — an important contributor to growth in Asia — rebounded.

The Shanghai Composite Index rose 0.3 percent to 2,663.21 while Hong Kong’s Hang Seng Index rose 0.4 percent to 21,257.39.

Other Asian markets also gained Friday after Japan said its economy grew more than estimated and better U.S. jobs and trade figures eased fears that the world’s largest economy might slip back into recession.

Japan’s Nikkei 225 stock average closed up 1.6 percent at 9,239.17 after slipping back from the morning’s 2 percent rise. Investors welcomed figures showing that improved capital spending helped Japan’s economy grow 0.4 percent in the second quarter from the previous quarter, compared with an initial estimate of 0.1 percent.

The yen continued its slide against the dollar from Wednesday’s 15-year high, bringing some relief to Japanese exporters, who led gains in Tokyo. Canon Inc. surged 5.6 percent, Toyota Motor Corp. rose 0.7 percent and Sony Corp. gained 1.7 percent.

South Korea’s Kospi Composite rose 1.0 percent to 1,802.58 and Taiwan’s benchmark gained 0.7 percent to 7,890.11. Markets in Thailand and New Zealand also rose.

Gains in Asia were helped by news that the number of people requesting first-time unemployment benefits in the U.S. fell to the lowest level in two months, adding to signs that employers aren’t resorting to staff cuts as economic growth slows. The U.S. trade deficit narrowed a greater-than-expected 14 percent in July to $42.8 billion, which also boosted confidence.

In New York overnight, the Dow Jones industrial average rose 28.23, or 0.3 percent, to close at 10,415.24. The Standard & Poor’s 500 index rose 5.31, or 0.5 percent, to 1,104.18 while the Nasdaq composite index rose 7.33, or 0.3 percent, to 2,236.20.

In currencies, the dollar traded above 84 yen but later fell back to 83.79 yen from 83.95 yen in New York late Thursday. The euro rose to $1.2730 from $1.2693.

Benchmark crude for October delivery was up $1.29 at $75.54 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost 42 cents to settle at $74.25 a barrel on Thursday.

Indian markets were closed Friday for the holiday of Ramzan-Id. Markets in Malaysia, Indonesia, Singapore and the Philippines were also closed for holidays.