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Asia stocks follow Wall Street higher

Mon, 01/09/2012 - 7:45pm
PAMELA SAMPSON - AP Business Writer - Associated Press

Asian stocks rose Tuesday, tracking slight gains on Wall Street and assisted by an absence of bad financial news.

Benchmark oil lingered above $101 per barrel while the dollar dropped against the euro and the yen.

Japan's Nikkei 225 index — reopening after a three-day holiday weekend — added 0.4 percent to 8,426.68. Hong Kong's Hang Seng index rose 0.6 percent to 18,969.75 while South Korea's Kospi jumped 1.6 percent to 1,856.36. Australia's S&P ASX 200 rose 1.1 percent at 4,152.20.

Benchmarks in Singapore, Taiwan, mainland China and Indonesia also posted gains.

Financial markets found "some relief on the lack of specific negative news," analysts at Credit Agricole CIB said in a report.

Improving economic data out of the U.S. was another factor working in favor of markets, said Cameron Peacock of IG Markets in Melbourne. The U.S. added 200,000 jobs in December in a burst of hiring that drove the unemployment rate down two notches to 8.5 percent, its lowest in almost three years, and led economists to conclude that the improvement in the job market might just last.

"With all the problems of the last few years, and the emergence of China as a legitimate economic superpower, it should not be forgotten that the U.S. is still the world's largest and most influential economy," Peacock said.

Energy-related shares rose as oil prices firmed up. South Korean refinery S-Oil Corp. gained 2.3 percent, while Japanese energy explorer Inpex Corp. gained 2.2 percent. Hong Kong-listed China Petroleum & Chemical Corp. added 1.5 percent.

Heavy machinery shares also rose. South Korean power equipment maker Doosan Heavy Industries & Construction gained 4 percent and Hyundai Heavy Industries Co. rose 4.6 percent. Japan's Hitachi Construction Machinery Co. rose 1.8 percent.

Olympus Corp. soared 21.5 percent after the Japanese camera and medical equipment maker announced it was suing 19 current and former executives for damages over fraudulent accounting that took place to hide staggering investment losses in the 1990s. The stock is still trading at about half its value prior to the scandal.

But Japanese exporters continued to feel the pinch of a strong yen, which lowers the value of expatriated profits and makes Japanese products more expensive overseas.

Mazda Motor Corp. fell 3 percent, Canon Inc. dropped 1.1 percent and Mitsubishi Motors Corp. lost 1.1 percent.

Stocks jumped in mainland China for a second day, as investors continued to cheer Premier Wen Jiabao's promise last weekend to channel lending to entrepreneurs who have been battered by weak global demand.

Still, trade figures for the world's No. 2 economy weakened in December. Growth in imports fell to 11.8 percent, barely above half the previous month's 22.1 percent gain. Exports rose 13.4 percent, down slightly from November's growth rate.

On Wall Street, stocks remained subdued Monday. The Dow closed up 0.3 percent at 12,392.69. The broader Standard & Poor's 500 index gained 0.2 percent to 1,280.70. The Nasdaq composite index rose 0.1 percent to 2,676.56.

European markets closed lower Monday. French and German leaders met to craft the regional fiscal treaty that they agreed to pursue last year.

The treaty would strengthen controls of spending by the 17 countries that use the euro. Excessive borrowing by nations such as Greece has hurt the European economy and roiled the financial industry.

Greece, Ireland and Portugal have all been bailed out but the fear in the markets is that much-bigger Italy and Spain may end up needing financial assistance. The yield on Italy's benchmark 10-year bonds on Monday continued to hover around the 7 percent mark, widely considered to be unsustainable in the long run.

Benchmark crude for February delivery rose 43 cents to $101.71 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 25 cents to settle at $101.31 in New York on Monday.

In currency trading, the euro rose to $1.2790 from $1.2762 late Monday in New York. The dollar fell to 76.81 yen from 76.89 yen.

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