Asian markets rise for a third day

  • Business
  • Saturday, 29 May 2010

PETALING JAYA: Asian markets rallied for a third day to close in positive territory yesterday as concerns over the eurozone’s debt crisis were eased somewhat by China’s commitment to continue diversifying its foreign currency holdings.

However, analysts said, the volatility that characterised the month of May would continue for the forseeable future with uncertainty over policy to contain the debt crisis and austerity measures implemented by eurozone governments to impact the markets.

Tokyo’s Nikkei 225 rose 1.28% to close at 9,762.98 despite the uncertain economic outlook following the release of economic data by the country’s statistics bureau yesterday.

According to the bureau, unemployment unexpectedly increased to 5.1% in April compared with the same month last year at 5%. Consumer prices, excluding fresh food, continued to fall, shedding 1.5% from a year ago after dropping 1.2% in March.

While a report last month showed exports were up, domestic demand continued to put a drag on the economy as household spending declined 0.7%.

Most economists expect a slowdown in global economic growth in the second half of the year as the effects of stimulus measures implemented by governments worldwide start to diminish.

This followed the lower-than-expected US gross domestic product growth, which came in at 3% according to Commerce Department data versus the department’s earlier projections for a 3.2% expansion and the market consensus for a 3.3% rise.

Among other markets in the region, Hong Kong’s Hang Seng Index gained 1.73% to close at 19,766.71, Sydney’s S&P/ASX 200 Index climbed 1.79% to close at 4,457.50 while Shanghai’s A share index was flat after dropping to an intraday low of 2,642.29 an hour before market close.

Seoul’s Kospi Index added 0.95% while the won eased against the US dollar after rising to the year’s high on Wednesday as tensions escalated between North and South Korea over the sinking of a South Korean warship two months ago.

Markets in Malaysia, Singapore, Thailand and Indonesia were closed for a holiday.

Meanwhile, European markets also rose for a third day in early morning trade with the Stoxx Europe 600 Index extending its weekly gain with the US dollar lower against the euro at around 1.24.

Nymex crude oil was up for a third day and hovered at US$75 per barrel while spot gold was trading at US$1,214 per ounce.

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