Euro optimism helps Asian stocks; Nikkei rises over 1%
City Index May 31, 2011 10:24 PM
<p>The MSCI Asia Pacific Index gained 1.1% to 135.8 in early afternoon trade, heading for its highest close since May 13. Five stocks advanced for […]</p>
The MSCI Asia Pacific Index gained 1.1% to 135.8 in early afternoon trade, heading for its highest close since May 13. Five stocks advanced for each that fell in the gauge, which last week completed its longest string of weekly losses in two years as concern deepened over Europe’s debt crisis and amid speculation a slowing global recovery will crimp earnings.
Japan’s Nikkei 225 (NKY) Stock Average climbed 1.1%, South Korea’s Kospi Index advanced 1.5% and Australia’s S&P/ASX 20 Index gained 0.9%. Hong Kong’s Hang Seng Index increased 0.9%, while China’s Shanghai Stock Exchange Composite Index added 0.3%.
In corporate news, Hong Kong based Cosco Pacific , operator of container facilities in Greece, climbed 1.2%. Sony, the maker of PlayStation gaming consoles that counts Europe as its biggest market outside of Japan, gained 1.1% in Tokyo. Meanwhile Hanwha Chemical, South Korea’s fourth-largest maker of plastic resins by sales surged 8.3% after Samsung Securities raised its share-price forecast.
The cost of protecting Tokyo Electric Power’s debt from default climbed and shares of Japan’s largest utility declined after ratings on its debt were lowered to junk status by Standard & Poor’s Ratings Services. Shares fell 3.4% to 315 yen at 11 am in Tokyo and have fallen 86% since March 10, the day before an earthquake and tsunami crippled one of Tepco’s nuclear plants.
Australian listed Lend Lease announced a rail contract for design and delivery for Pacific National. The deal was struck through Abigroup which is part of the Valemus acquisition Lend Lease recently made. The contract, worth around $100 million is significant and positions Lend Lease in the very lucrative rail infrastructure services market. Pacific National could see more contracts in this area for Lend Lease through Abigroup, potentially threatening United Group and Downer EDI which is struggling with its own rail issues.
Staying in the Pacific region, New Zealand’s business confidence rose to a 12-month high in May as record-low interest rates and higher commodity prices bolster the prospect for an economic recovery from the nation’s deadliest earthquake in 80 years. New Zealand’s currency was little changed at 82.31 US cents at 1.10 pm after rising to 82.43 cents, the highest since exchange-rate controls were lifted in 1985.
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