More gains expected in Asia as Berlusconi offers to step down
City Index November 9, 2011 7:38 PM
<p>Asian shares should expect more gains today particularly given yesterday’s lackluster performance. Europe remains the key talking point, with news out in the past few […]</p>
Asian shares should expect more gains today particularly given yesterday’s lackluster performance. Europe remains the key talking point, with news out in the past few hours that Italian Prime Minister Silvio Berlusconi has offered to resign.
There should be some optimism around the announcement with expectations a change in leadership will see a stronger focus on addressing Italy’s fiscal position.
Regional issues are also weighing on Asian shares. An admission by Japanese firm Olympus that losses were hidden does little to boost corporate confidence. Olympus has admitted that three of its top executives colluded to hide losses from investors.
Shares were last down almost 30% following the news. There will be a series of confidence building among other key corporate that will be mindful of skeptics who might draw similar distinctions with their businesses.
Oil continues to also trickle higher on the back of renewed Middle East tensions. Light crude and Brent were last trading slightly below US$96 and US$116 per barrel, respectively.
Traders are nervous ahead of the release of an International Atomic Energy Agency (IAEA) report which could find Iran sought to miniaturize a Pakistani nuclear weapon design to fit on its ballistic missiles.
Iran shares the Strait of Hormuz water channel with neighboring Arab states. This waterway accounts for almost 33% of total daily world seaborne oil shipments, hence the sensitivity around oil markets of which Asian countries are major consumers.