Asian Markets Mixed Before Key EU Summit
Asian markets were mixed on Thursday with a positive lead from Wall Street offset by low expectations of a breakthrough at a key EU summit to resolve the spiraling eurozone debt crisis.
The euro was little changed as investors waited anxiously to see if European Union leaders gathering for a two-day meeting starting later would offer any major support to the ailing single currency.
Tokyo stocks were 0.91 percent higher by noon, while Sydney edged up 0.23 percent. But Hong Kong was flat, Seoul was down 0.27 percent, and Shanghai slipped 0.41 percent.
All eyes are on Brussels, but investors fear that divisions may scupper efforts to bring the euro back from the brink.
German Chancellor Angela Merkel flew to Paris late Wednesday for talks with French President Francois Hollande in an 11th-hour bid to bridge the gap between Europe’s two biggest economies over how to solve the crisis.
Adding to the pessimism surrounding the summit, she warned lawmakers in Berlin that there were “no quick, no easy” solutions, and no “magic formula” to end the problems in the 17-nation currency bloc.
The debt crisis has now forced five countries — Cyprus, Spain, Greece, Portugal and Ireland — to request aid.
“Frankly, there is a dearth of trading incentives, as all eyes now shift to the EU summit,” said Kenichi Hirano, operating officer at Tachibana Securities.
A bright spot amid the eurozone gloom was news that shares in Malaysia palm oil giant Felda Global jumped 18.46 percent on its stock market debut, in the world’s second-largest IPO this year after Facebook.
Felda Global opened at 5.39 ringgit ($1.69) on the Bursa Malaysia, well up from the institutional price of 4.55 ringgit in the flotation, which raised $3.12 billion.
Positive data from the United States also gave markets some relief, with a pending home sales report that returned to March’s two-year high in May and a solid increase in durable goods orders.
At the close of trade Wednesday, the Dow Jones Industrial Average was up 92.34 points (0.74 percent) at 12,627.01.
The S&P 500 index advanced 11.86 (0.90 percent) to 1,331.85, while the tech-rich Nasdaq rose 21.26 (0.74 percent) to 2,875.32.
In Sydney, News Corp. stock jumped 3.37 percent Thursday on a Wall Street Journal report that Rupert Murdoch company’s board had agreed in principle to separate its entertainment division from struggling publishing businesses.
The rise brought the shares’ rally to eight percent since news of the split emerged earlier this week.
New York’s main oil contract, light sweet crude for August delivery, was 39 cents higher at $80.60 a barrel and Brent North Sea crude for August delivery advanced 23 cents to $93.73.
The common currency bought $1.2491 and 99.20 yen in Tokyo trade, from $1.2467 and 99.38 yen in New York late Wednesday. The dollar was weaker at 79.44 yen from 79.71 yen.
Gold was at $1,575.70 an ounce at 0240 GMT, compared with $1,566.96 an ounce late Wednesday.