Asia stocks up on hopes for Europe debt crisis fix
BANGKOK—Asian stocks rose Wednesday amid growing optimism that European leaders will approve aggressive plans by the end of the week to rescue the region from a debt crisis that has roiled financial markets for months.
Benchmark oil rose above $101 per barrel, while the dollar fell against the euro but gained against the yen.
Japan's Nikkei 225 rose 0.8 percent to 8,644.28 and South Korea's Kospi added 0.7 percent to 1,916.15. Hong Kong's Hang Seng gained 0.7 percent 19,081.36. Australia's S&P/ASX 200 climbed 0.9 percent to 4,298.20. Benchmarks in Singapore, Taiwan and Indonesia also rose while mainland China and Malaysia fell.
On Wall Street, stocks mostly rose Tuesday on a report that European leaders might create a second bailout fund to supplement the one they have already agreed to. The second fund would nearly double the capacity of Europe's financial rescue programs, the Financial Times reported.
The plan involves allowing the existing 440 billion euros bailout fund to continue running when a new 500 billion euros facility comes into force in mid-2012, almost doubling the rescue system's firepower, Stan Shamu of IG Markets wrote in a report. "This latest move might just be the 'bazooka' Europe needs to appease markets."
Shares of camera and medical equipment maker Olympus fell 6.9 percent, a day after an independent panel determined that the company had falsified accounting records to cover up huge investment losses from the 1990s. The company risks being delisted from the Tokyo Stock Exchange.
Japanese shipper Mitsui O.S.K. Lines rose 5.8 percent after an agreement with four other tanker owners to jointly operate very large crude carriers known as VLCCs starting early next year, Kyodo News Agency reported.
Asian stocks tumbled Tuesday, hours after Standard & Poor's credit ratings agency warned that it might downgrade 15 of the 17 countries that use the euro -- even Germany, which has a top AAA rating and Europe's strongest economy.
On Tuesday, S&P said it might also cut the AAA rating of Europe's bailout fund. The fund needs that top rating to cheaply raise money, and losing it would mean it would cost billions more to fund bailouts.
Hopes that Europe was finally serious about taming its debt crisis boosted U.S. stocks Tuesday. The Dow Jones industrial average closed up 0.4 percent at 12,150.13. The Standard & Poor's 500 index closed up 0.1 percent to 1,258.47. The Nasdaq composite average closed down 0.2 percent at 2,649.56.
Benchmark crude for January delivery was up 22 cents to $101.50 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 29 cents to settle at $101.28 on Tuesday.
In currency trading, the euro rose to $1.3420 from $1.3414 late Tuesday in New York. The dollar rose to 77.74 yen from 77.70 yen.
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