Asian stock markets mostly higher amid confidence in regional growth prospects

By Alex Kennedy, AP
Friday, September 17, 2010

Asian stock markets rise amid growth confidence

SINGAPORE — Asian stock markets were mostly higher Friday amid confidence the region’s growth will be sustained despite slower economic recoveries in developed nations. European shares also climbed.

Some moderation in Asia’s expansion is expected next year but growth rates are likely to remain well above those in the advanced economies, analysts say. China, now the world’s second-biggest economy after three decades of blistering growth, will likely expand 10.1 percent this year and 9 percent next year, according to Rabobank.

“Asia equities will continue to be well supported, underpinned by attractive valuations and resilient domestic and regional growth,” Singapore’s DBS bank said in a report. Unless U.S economic conditions “deteriorate to an outright recession, we don’t see much downside for equities.”

In early trading in Europe, Britain’s FTSE 100 rose 1.1 percent, Germany’s DAX index gained 1.1 percent, and France’s CAC-40 advanced 1.5 percent. Futures pointed to gains on Wall Street with Dow futures up 74 points, or 0.7 percent, at 10,624.00.

In Japan, the benchmark Nikkei 225 stock average gained 116.59, or 1.2 percent, to 9,626.09. Japanese exporter stocks have moved higher since Tokyo intervened in currency markets to cap the yen’s rise against the dollar earlier this week.

South Korea’s Kospi rose 0.9 percent to 1,827.35, Hong Kong’s Hang Seng added 1.3 percent to 21,970.86 and Australia’s S&P/ASX 200 advanced 0.7 percent to 4,638.90.

Shares in Singapore, India and Indonesia also floated higher while the Shanghai Composite Index dropped by 0.2 percent to 2,598.69. Thailand’s market also fell.

The gains in Asia and Europe came despite mixed trade in New York on Thursday as investors sold shares after the recent rally.

News that FedEx, which is seen as a bellwether for the U.S. economy, would cut 1,700 jobs to try to fix its domestic trucking business, also weighed on Wall Street.

Figures showing that the number of newly laid-off workers seeking U.S. unemployment benefits dropped by 3,000 last week to 450,000 — its lowest level in two months — failed to drive stock markets, though it may be a sign that labor market conditions are improving.

And though the monthly survey of manufacturing conditions in the mid-Atlantic from the Federal Reserve Bank of Philadelphia improved, it still points to a decline in output. The so-called Philly Fed index improved to minus 0.7 in September from August’s minus 7.7.

The Dow Jones industrial average rose 22.10, or 0.2 percent, to close at 10,594.83. The Dow has now risen in 10 of the last 12 days, but it’s still 5.5 percent below its 2010 closing high level reached on April 26.

Broader indexes were mixed. The Standard & Poor’s 500 index fell 0.4, or 0.04 percent, to 1,124.66. The Nasdaq composite edged up 1.93, or 0.08 percent, to 2,303.25.

In currencies, the dollar rose to 85.86 yen from 85.78 yen late Thursday in New York. The euro gained to $1.3148 from $1.3068.

Benchmark crude for October delivery was up 55 cents at $75.12 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost $1.45 to settle at $74.57 a barrel on Thursday.

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