Asian Markets Mixed, European Summit in Focus

By webadmin on 12:04 pm Jun 27, 2012
Category Archive

Asian markets were mixed Wednesday, with a positive lead from Wall Street offset by lingering doubts about the upcoming European Union summit aimed at tackling the eurozone debt crisis.

Tokyo eased 0.19 percent, Hong Kong and Shanghai were flat, Sydney rose 0.22 percent and Seoul fell 1.19 percent.

Leaders meeting in Brussels for two days of talks from Thursday will consider proposals to give EU authorities more power over national budgets, and to centralize banking supervision.

But economists are unconvinced they will be able to overcome their differences to hammer out a coherent deal.

Some of the region’s top finance chiefs met in Paris Tuesday to try to pave the way for a summit deal.

French Finance Minister Pierre Moscovici said the gathering would be anything but “banal” and would tackle real issues, while Italian Prime Minister Mario Monti vowed to work overtime to save the euro.

“We cannot allow this extraordinary European piece of work to which Italy has always contributed to go bust,” Monti said in a speech to the Italian parliament.

A report drawn up by EU and eurozone leaders Herman Van Rompuy, Jose Manuel Barroso, Jean-Claude Juncker and Mario Draghi proposes to move “over the next decade” towards greater centralized power for the “financial sector, for budgetary matters and for economic policy.”

In the report, EU president Van Rompuy said: “The euro-area level would be in a position to require changes to [national] budgetary envelopes if they are in violation of fiscal rules.”

The meeting comes against a backdrop of a downgrade for 28 Spanish lenders by Moody’s and an appeal by Madrid for rescue cash to prop up its banking sector.

This week also saw Cyprus become the latest eurozone member to ask for a handout as its economy struggles owing to its exposure to Greece’s debt mountain.

US markets were given a boost by the S&P Case-Shiller price index for 20 major US cities, which rose for the third straight month in April.

The modest rise in the US market, caused by property prices falling less than expected, provided a fillip as the sector is a key component in the world’s biggest economy.

However, separately the Conference Board reported that consumers grew more pessimistic about the economy for the fourth consecutive month in June.

The Dow gained 0.26 percent, the S&P 500 rose 0.48 percent and the Nasdaq added 0.63 percent.

In Sydney shares in Rupert Murdoch’s News Corporation soared 4.3 percent to Aus$21.68 after confirming it is considering a split into two publicly traded companies, separating its publishing assets from its bigger entertainment arm.

The euro bought $1.2485 and 99.18 yen in early Asian trade, compared with $1.2495 and 99.36 yen in New York late Tuesday. The dollar was trading 79.44 yen against 79.51 yen.

On oil markets New York’s main contract, light sweet crude for August delivery was seven cents higher at $79.43 a barrel and Brent North Sea crude for August delivery dropped 27 cents to $92.75.

Gold was at $1,573.90 an ounce at 0200 GMT, compared with $1,584.76 late Tuesday.

Agence France-Presse