Asian stocks up as Europe announces new debt steps
BANGKOK—Investors waded into Asian stocks Thursday, heartened by new efforts by European leaders to strengthen their continent's banks and deal with Greece's massive debts.
Japan's Nikkei 225 index gained 1.2 percent to 8,839.13 and Hong Kong's Hang Seng index was 1.3 percent higher at 18,563.34. South Korea's Kospi index rose 1 percent to 1,828.67. Australia's S&P/ASX 200 rose 0.7 percent to 4,232.30.
Benchmarks in Taiwan, Malaysia and the Philippines also rose, while those in Singapore, Shanghai and New Zealand fell.
On Wednesday, European Commission President Jose Manuel Barroso called for European banks to raise billions in new capital and for a stricter accounting of their exposure to sovereign debt. Barroso also called for a permanent bailout fund to come into force by mid-2012, one year ahead of schedule.
Barroso's proposals for helping Europe's struggling banks fueled investor appetite for riskier assets like stocks, analysts said.
"Risk appetite improved, bank stocks rallied ... after EC President Jose Barroso pledged for urgent recapitalizing of European banks," Credit Agricole CIB said in a research note.
Investors also shrugged off Slovakia's rejection Tuesday of a measure to strengthen Europe's bailout fund, focusing hopes that a solution would be found before a summit of EU leaders next week.
In the U.S., meanwhile, companies have begun to release their third-quarter earnings reports, and so far the results have been mixed.
The results "will be crucial" to determining the direction of stock markets over the coming days, Credit Agricole said.
PepsiCo Inc. rose 2.9 percent after the company said its income rose because of stronger sales of snacks and beverages, especially overseas. But Alcoa Inc. dropped 2.4 percent after the aluminum maker reported earnings that were weaker than analysts expected.
The Dow rose 0.9 percent to close at 11,518.85. The S&P 500 rose 1 percent to 1,207.25. The Nasdaq composite index rose 21.70, or 0.8 percent, to 2,604.73.
Benchmark oil for November delivery was down 83 cents to $84.74 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 24 cents to end at $85.57 per barrel on the Nymex on Wednesday.
In currencies, the euro slipped to $1.3779 from $1.3793 late Tuesday in New York. The dollar dropped to 77.08 yen from 77.30 yen.