Muted trading in Asia; Qantas announces joint venture with China Eastern airline

<p>The new trading week brought a muted response to Asian markets with caution on traders’ minds. The regional MSCI Asia Pacific index was last trading […]</p>

The new trading week brought a muted response to Asian markets with caution on traders’ minds. The regional MSCI Asia Pacific index was last trading 0.2% lower while S&P500 index futures were pointing to a modest 0.2% gain when shares resume trading tonight.

There are renewed concerns over the European debt situation following on from Italian Prime Minister Mario Monti’s caution that Spain’s inability to meet fiscal targets will trigger another round of tension.

The euro weakened slightly to last trade at 1.3254. The Australian dollar was also weaker ahead of private sector lending numbers due out tomorrow, last trading at 1.0450 against the US dollar but most regional traders were focused on the Japanese Yen as it retreated from its largest weekly gain for the year last week. The dollar was last buying 82.70 Yen.

Gold was steady at US$1662.oz while copper looks set for more gains at around US$3.83/lb.

In regional corporate news, Australian airline Qantas announced plans to launch an Asian budget carrier out of Hong Kong. Under the deal, Qantas-owned Jetstar, will form a joint venture with China Eastern to create Jetstar Hong Kong.

The venture adds to Jetstar’s recent regional initiatives. The new airline will initially use short-haul Airbus A320 aircrafts to service routes in Asia including China.

Both joint venture partners will contribute around US$99m over a three year period with plans to have a fleet of 18 planes by 2015. Qantas shares closed 2% higher.

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