Asian stocks recovered yesterday on bargain hunting after huge losses in the previous session, but gains were limited by lingering fears about European debt and tensions on the Korean peninsula.
Traders took their cue from Wall Street, where the Dow recovered from heavy losses to end down just 0.23 percent, although a weak euro continued to hurt exporters despite European austerity measures.
Seoul closed 1.36 percent, or 21.29 points, higher at 1,582.12 after plunging Tuesday following unconfirmed reports that the North had put its civilians and army on combat alert.
Tokyo’s Nikkei ended 0.66 percent, or 62.77 points, higher at 9,522.66 and Sydney picked up 0.98 percent, or 41.9 points, to close at 4,307.2.
Hong Kong closed 1.11 percent higher at 19,196.45 and Shanghai rose 0.12 percent to 2,625.79.
Dealers moved in to buy cheaper stocks after markets hit lows not seen for several months. Markets have been on edge due to fears that a debt crisis in Europe could spread and derail the global recovery.
Those fears were stoked after Spain announced it had bailed out a provincial bank, heaping more pain on the country’s already strained financial system.
The euro continued to suffer, dropping to 1.2178 dollars in New York on Tuesday – close to four-year lows – before recovering to 1.2337. The single unit was sitting at 1.2284 dollars in early Asia trade.
Against the yen the euro rose slightly to 111.13 from 110.98 in New York, where it had slumped at one point to a nine-year low of 108.84.
Fears persisted about tensions on the Korean peninsula, after Pyongyang said it was cutting all ties with its neighbour.
It was the latest phase of a row that began last week when an international panel concluded a North Korean submarine had torpedoed one of Seoul’s warships in March.
The South announced a package of reprisals on Monday but the North has threatened full-scale war if there is any attempt to punish it.
The won was at 1,244.80 to the dollar in Asia yesterday, compared with 1,250 Tuesday. The Bank of Korea was believed to have sold around two billion dollars during Asian working hours Tuesday, traders estimated, after it hit 10-month lows. The South Korean currency has plunged 13 percent this month.
Markets were virtually unmoved by eurozone member Italy’s announcement of austerity measures worth 24 billion euros aimed at stabilising the nation’s debt, which stood at 115.8 percent of gross domestic product last year.
The package follows similar moves in Spain, Greece and Portugal aimed at stemming a loss of confidence in indebted euro economies whose deficits soared during the global slump. Non-eurozone member Britain also unveiled spending cuts.
There was some good economic data out of the United States Tuesday, with a consumer confidence index showing people were more upbeat.
The survey by the Conference Board had the index at 63.3 points, up from a revised 57.7 last month – 100 points signifies total confidence and zero represents absolute pessimism.
Oil was higher, with New York’s main futures contract, light sweet crude for delivery in July, adding 55 cents to 69.30 dollars a barrel.
Brent North Sea crude for July delivery gained 35 cents to 69.90 dollars.
Gold closed at 1,207.00-1,208.00 US dollars an ounce in Hong Kong, up from Tuesday’s close of 1,191.00-1,192.00 dollars.
In other markets:
• Jakarta rose 7.27 percent, or 182.67 points to 2,696.78.
• Singapore rose 1.71 percent, or 45.41 points, to close at 2,696.02.
Insurance giant Prudential, which started trading ordinary shares on the Singapore Exchange on Tuesday, finished at 7.51 US dollars, up 10 US cents.
• Taipei rose 1.14 percent, or 80.98 points, to end at 7,167.35.
UMC was 1.45 percent higher at 14.0 Taiwan dollars, while Hon Hai rose 2.38 percent to 129.0 as the company moved to allay concerns about suicides at its Chinese subsidiary.
• Kuala Lumpur closed down 0.10 percent, or 1.19 points, at 1,248.94.
Shipping firm MISC lost 3.40 percent to 8.13 ringgit, conglomerate YTL Corp fell 3.20 percent at 6.95 and gaming group Genting gained 3.30 percent to 6.56.
• Manila ended 0.73 percent, or 22.56 points, higher at 3,125.15.
SM Prime Holdings added 7.3 percent to 11.00 pesos, Energy Development rose 1.1 percent to 4.75 and Ayala Land picked up 2.0 percent to 12.75.
• Wellington rose 0.25 percent, or 7.36 points, to 3011.19.
Telecom, which Tuesday hit an all-time low, gained 2.7 percent to close at 1.90 New Zealand dollars, while Fletcher Building closed up 1.3 percent at 7.71 and fishing company Sanford added 0.2 percent to 4.46.
• Bangkok rose 1.06 percent or 7.65 points to close at 728.94.
Coal producer Banpu soared 28.00 baht to close at 582.00 baht and PTT Plc gained 4.00 baht to close at 237.00 baht. (AFP)
