15 JUNE 2012
Asian Shares Rise on Signs Central Banks May Help If Chaos After Greece Polls
By Dow Jones Newswires
Asian markets were up Friday on signs that major central banks are planning to try to rescue the global economy, though there was caution ahead of the Greek elections over the weekend.
“The mood is turning slightly more positive compared to a week ago, but we remain cautious until we see the results,” said Diane Lin, fund manager at Pengana Capital in Sydney, which manages US$1.1 billion.
A Reuters report said that central banks are preparing for coordinated action to provide liquidity if the elections in Greece lead to market chaos.
Another positive was the UK’s move to introduce a series of measures designed to shield its financial system from the ongoing European crisis, with plans to flood banks with cheap credit in an attempt to jump-start lending to British businesses and households.
The efforts helped push the euro up 0.6 percent overnight to US$1.2633, though it weakened slightly in Asia to US$1.2625. The dollar dropped against the yen to 79.25, compared with 79.35 on Thursday night.
The Australian dollar was trading just above parity against the greenback early Friday at US$1.0004.
Japan’s Nikkei was up 0.2 percent ahead of a Bank of Japan policy meeting later in the day; South Korea’s Kospi was down 0.8 percent, while Australia’s S&P ASX 200 was up 0.3 percent. Hong Kong’s Hang Seng Index gained 1 percent, the China Shanghai Composite edged up 0.3 percent and Singapore’s Strait Times Index was 0.4 percent higher.
Oil extended Thursday’s gains, climbing to US$84.40 a barrel in Asia. In addition to the broad hopes for stimulus, the price of crude was helped by a request by OPEC for its members to cut production to maintain the cartel’s oil output ceiling.
Trading in the US was positive, despite poor employment data.
The number of Americans making initial claims for unemployment benefit expectedly rose and the previous week’s number was revised upwards. Also, US consumer prices rose 0.2 percent in May.
Low inflation and weak jobs figures were taken as a sign that the Federal Reserve could introduce monetary stimulus when it meets next week, pushing the Dow Jones Industrial Average up 1.2 percent.
South Korea’s Kospi was dragged down by selling by foreign investors and the poor performance of Samsung Electronics, which dropped 3.3 percent after operations at some of its flat-panel-manufacturing lines were suspended due to a power cut in Tangjeong, south of Seoul. Operations have been restored and the company is assessing the damage.
Fashion retailer Esprit gained 6.7 percent early in Hong Kong after the outgoing chief executive tried to subdue speculation that the company has fundamental problems by reiterating that his resignation was due to family reasons.
Upheaval in the company’s senior management saw the company lose 31.5 percent of its value over the previous two sessions.
Publish date: 15/06/12