Asian Stocks Rise on China Optimism
Asian stock markets rose for a second session Monday, with Hong Kong’s benchmark spiking more than 2 percent, amid optimism about China after the Chinese premier said the economy was improving.
Still, that optimism was tempered by unease about the U.S. economic outlook, which depressed oil prices, and last week’s declines on Wall Street. Investors are also worried that the huge run-up in global stock markets over the last three months may have been overdone.
Hong Kong’s Hang Seng index surged 394.11 points, or 2.2 percent, to 18,309.49 after China’s Premier Wen Jiabao was quoted by state media over the weekend as saying China’s economy was beginning to recovery steadily amid government stimulus spending. He said Beijing will maintain an easy credit policy to support growth.
China’s Shanghai Composite index rose 26.13 points, or 0.9 percent, to 2,906.62. Japan’s Nikkei 225 stock average edged up 28.01 points, or 0.3 percent, to 9,814.27, while South Korea’s Kospi climbed 5.96 points, or 0.4 percent, to 1,388.98.
“Hong Kong is up because the Chinese markets are up. Markets are up in Shanghai because investors are optimistic about the future,” said Francis Lun, general manager of Fulbright Securities in Hong Kong.
Sentiment in China was helped by the World Bank’s decision last week to raise its forecast of the country’s 2009 economic growth from 6.5 percent to 7.2 percent. Chinese stocks rose last week to a 10-month high, driven by recent data showing investment, retail sales and other indicators improving despite a plunge in exports.
Elsewhere in Asia, India’s Sensex opened higher, climbing 0.5 percent to 14,599.54, while Australia’s benchmark added 0.6 percent to 3,923.5.
Wall Street finished mixed Friday, leaving the three major indexes with their first weekly loss since early May. The Dow Jones industrial average fell 15.87, or 0.2 percent, to 8,539.73, while the broader Standard & Poor’s 500 index rose 0.3 percent to 921.23. The tech-heavy Nasdaq gained 1.1 percent to 1,827.47.
For the week, the Dow lost 3 percent, while the S&P 500 sank 2.6 percent.
Analysts are divided over whether the U.S. market’s pullback has more to go, or if it can now move higher. Traders have grown worried in recent weeks that an economic recovery in the U.S. may be more subdued than originally hoped. Many predict choppy trading well through the summer, when there is typically less volume, and as the market heads into earnings season in July.
U.S. futures were narrowly mixed. Dow futures were up 8 points, or 0.1 percent, to 8,484. S&P 500 futures little changed at 916.10.
Oil slipped in Asia, with benchmark crude for July delivery dropping 38 cents to $69.17 a barrel. On Friday, it fell $1.82 to $69.55.
In currencies, the dollar fell to 95.88 yen from 96.26 yen late Friday in New York. The euro declined to $1.3911 from $1.3936.
6/22/2009 12:32 AM JOE McDONALD AP Business Writer BEIJING