Asian Stocks Rise On US, Greece Optimism

By Bhaskar Prasad | August 06 2012 12:46 AM

Asian markets rose Monday after the encouraging news from the U.S. that the economy was regaining momentum to a certain extent and that Greece was showing improvement in complying with bailout requirements.

REUTERS

An investor looks at an electronic board showing stock information at a brokerage house in Huaibei, Anhui province October 20, 2011.

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Japan's Nikkei Stock Average rose 1.74 percent or 149.01 points to 8704.12. Among major gainers were Inpex Corp (4.79 percent), FANUC Corp (4.75 percent) and Mazda Motor Corp (4.49 percent).

The Chinese Shanghai Composite rose 0.41 percent or 8.64 points to 2141.43. Hong Kong's Hang Seng was up 2.01 percent or 395.14 points to 20061.32. Among major gainers were Sino Land Co Ltd (4.69 percent) and CNOOC Ltd (3.13 percent).

South Korea’s KOSPI Composite Index rose 2.01 percent or 37.15 points to 1885.83. Shares of Samsung Electronics Co Ltd climbed 4.42 percent and shares of Hyundai Motor Co rose 0.86 percent.

India's BSE Sensex was up 0.67 percent or 115.12 points to 17313.02. Major gainers were Castrol India (3.04 percent), ONGC (1.34 percent) and HDFC Bank (1 percent).

The U.S. Bureau of Labor Statistics announced the nonfarm payrolls report Friday, which measures the change in the number of people employed during the previous month, excluding the farming industry. The bigger than expected 163,000 increase in nonfarm payrolls in July should ease fears that of the U.S. economy following Europe into recession. It was expected to increase by 100,000 in July, up from 80,000 in June.

However, it could be a temporary effect as concerns about a possible slack the U.S. economy still persist. “Overall, July's gain in payrolls is obviously a vast improvement on what we've seen over the past few months. But equally it is still well short of the 250,000 plus gains we were seeing at the start of this year. It also isn't strong enough to drive the unemployment rate lower, which is what the Fed really wants to see. So, on balance, we doubt this would be enough to persuade the Fed to hold fire in September,” said Paul Ashworth, an economist at Capital Economics.

Another factor that lifted the market confidence was the report which showed that the troika comprising the European Commission, the European Central Bank and the International Monetary Fund saying that Greece was meeting the conditions to receive the bailout package. The troika officials noted that the coalition government in Greece was moving ahead in finding budget cuts required for continuing the bailout programme.