Asian stocks higher after Wall Street gains

By YOUKYUNG LEE,AP Business Writer Updated at 2013-07-23 07:19:15 +0000


SEOUL, South Korea (AP) — Asian stock markets rose Tuesday as overnight gains on Wall Street and the Japanese prime minister's vow to focus on economic reforms helped investors brush off a downbeat U.S. housing survey and weak quarterly earnings.

Analysts said downbeat news on the U.S. economy was double-edged for financial markets. On one hand, the surprising fall in U.S. existing home sales in June to a seasonally adjusted annual rate of 5.08 million dampened optimism about the U.S. economic recovery. But investors could also see the weak data as ensuring continued bond-buying by the U.S. Federal Reserve.

Emerging market stocks have lost ground since Fed Chairman Ben Bernanke said the central bank will wind down its stimulus when the U.S. economy recovers. The remarks rattled financial markets in Asia, as it prompted foreign investors to pull out their funds from the emerging markets.

"As the U.S. economic data slows down, it could delay the talk on the so-called exit strategies, relieving investors who are worried about emerging markets," said Lim Dong-min, an economist at Kyobo Securities in Seoul.

A meeting among the central bank chiefs and finance ministers from the Group of 20 countries in Moscow ended with a positive note for emerging markets on Sunday. Major economies such as the U.S. indicated they will be mindful of the impact on the emerging markets as they begin to scale back monetary easing.

Japan's Nikkei 225 was 0.8 percent higher at 14,771.46, its second day of gains since Prime Minister's Shinzo Abe's ruling coalition gained control of the upper house in weekend elections, possibly making it easier to implement reforms aimed at lifting the world's No. 3 economy out of its long slump.

On Monday, Abe pledged that economic recovery will be the government's top priority.

Since Abe took office following a lower house election victory in late December, aggressive monetary easing and government spending have helped push stocks higher while business confidence has improved and the weaker yen has eased pressure on exporters.

South Korea's Kospi rose 1.1 percent to 1,901.21. South Korea's government said it will unveil a new set of measures to boost the stagnant real estate market including lower taxes on purchases of properties.

Hong Kong's Hang Seng advanced 2.2 percent to 21,879.66 and Australia's S&P/ASX 200 gained 0.2 percent to 5,011.10. Stocks in mainland China, Taiwan, the Philippines and Indonesia also rose.

Investors in Asia are looking ahead to a week full of corporate earnings reports. Apple Inc. will disclose its quarterly results after the U.S. market closes on Tuesday. In Seoul, Asian tech titan Samsung Electronics will release its quarterly performance before trading starts on Friday.

On Monday, the Dow Jones industrial inched up 0.01 percent to 15,545.55. McDonald's slump following its weaker-than-expected quarterly performance weighed on the index.

The Nasdaq composite climbed 0.4 percent to 3,600.39. The S&P 500 rose 0.2 percent to 1,695.53 on Monday. The index is at an all-time high, though trading volumes were lower than average.

In currency markets, the dollar rose to 99.46 yen from 99.32 yen late Monday. The euro rose to $1.3198 from $1.3186.

Benchmark crude for September delivery was up 11 cents to $107.05 a barrel in electronic trading on the New York Mercantile Exchange. The contract dropped $1.14 to finish at $106.91 on Monday.