Business

Asian shares up as US data drives year-end

December 23, 2011

SINGAPORE, Dec 23 ― Asian stocks edged up today, as signs of a strengthening economy in the United States encouraged a modest year-end rally in riskier assets.

Wall Street stocks had risen for a third straight day yesterday, leaving the S&P 500 index virtually flat for the year, after data showed new claims for unemployment benefit dropped to their lowest in three years.

The euro crept fractionally higher, but remained subdued amid doubts over how effective this week’s European Central Bank tender of cheap loans will be in easing the financial strain on troubled euro zone economies.

MSCI’s broadest index of Asia Pacific shares outside Japan rose 0.5 per cent, with Australian shares rising more than 1 per cent. Tokyo’s financial markets were closed for a holiday.

Asian equity markets, both developed and emerging, have sharply underperformed US stocks in 2011, with the MSCI Asia ex-Japan and the Nikkei share average both down about 18 per cent, while Australia’s benchmark has lost about 13 per cent.

The euro crawled up to around US$1.3055 in thin trade.

The ECB’s first ever tender of ultra-cheap three-year loans on Wednesday, which saw 523 banks gorge on a total of €489 billion, has failed to win the single currency much support.

But despite the long-running debt crisis the euro is only down around 2.5 per cent for the year, having found support from higher ECB interest rates in the first half of 2011 that pushed it to a year high near US$1.50 in May. ― Reuters


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