Asian markets mostly higher on euro hopes

Asian markets mostly rose yesterday, lifted by Italy’s backing for new austerity measures while dealers looked ahead to a Franco-German meeting to save the euro.
Investor confidence remained high after last week’s rally that was spurred by the decision of six major central banks to provide cheap dollars to under-pressure lenders in a bid to boost financial markets.
Tokyo was 0.60 percent, or 52.23 points, higher at 8,695.98, Sydney closed up 0.78 percent, or 33.3 points, at 4,321.3 and Seoul climbed 0.36 percent, or 6.86 points, to 1,922.90.
Hong Kong gained 0.73 percent, or 139.30 points, to end at 19,179.69 but Shanghai fell 1.16 percent, or 27.43 points, to 2,333.23.
The region was given a positive cue after the US Labor Department said unemployment dropped to a 32-month low of 8.6 percent in November, surprising most analysts who forecast it would hold at 9.0 percent.
The US economy created a net 120,000 jobs, close to forecasts and 20 percent above October.
On Sunday Italy’s cabinet agreed an austerity plan that aims to eliminate its budget deficit by 2013, including 17 billion euros in new taxes, 13 billion euros in public spending cuts, and 10 billion euros in measures aimed at boosting growth.
“News that Italy will accept new growth and austerity measures at least gets us on the right track and may yet be another reason for investors to pull the buy trigger this morning,” said Ben Le Brun, market analyst at OptionsXpress.
Markets have slumped in recent months amid fears that Italy – the eurozone’s third biggest economy – would be the latest nation to succumb to the region’s debt crisis, after Greece, Ireland and Portugal.
The leaders of France and Germany were due to meet yesterday to hammer out a plan for further fiscal integration of eurozone economies, which is seen as the only real chance the bloc has of surviving.
In what is seen as a crucial week for the euro, the mini-summit involving French President Nicolas Sarkozy and German Chancellor Angela Merkel comes ahead of a meeting of all European Union leaders on Thursday and Friday.
Whatever proposals emerge from the talks must be seen as a credible guarantee that eurozone governments will at last bring their deficits under control and thereby satisfy markets.
European Central Bank chief Mario Draghi has said he could then take action, with many hoping the ECB will intervene to protect European banks from a credit crunch.
However, some analysts remain nervous.
“There is a substantial precedent for expecting disappointment here given that the very nature of the crisis does not lend itself to a quick fix,” said Stewart Hall, senior currency strategist at RBC Capital Markets.
Focus this week “will fall on how a ‘re-founded’ Europe will look in terms of deeper integration and the push for fiscal union,” he told Dow Jones Newswires.
On currency markets the euro fetched USD 1.3440 and 104.75 yen in late Tokyo trade, almost flat from USD 1.3403 and 104.53 yen in New York late Friday. The dollar was changing hands at 77.95 yen, compared with 78.05 yen.
New York’s main oil contract, light sweet crude for delivery in January, was up 56 cents to USD 101.52 a barrel in the afternoon.
Brent North Sea crude for January delivery rose 97 cents to USD 110.91.
Gold was trading at USD 1,745.65 an ounce at 0810 GMT, from USD 1,749.20 late Friday.

(AFP)