Asia stocks up on eurozone plan hopes

SINGAPORE: Asian shares rose today on hopes that euro zone officials will act to corral Greece’s debt woes and prevent another full-blown banking crisis, but the euro failed to hold on to all its gains.

After three sessions of wild swings on commodities markets, oil and copper rose, but gold fell further to stand about US$300 below the record of more than US$1,920 an ounce it scaled in early September.

Turbulence on global markets since late July has been driven by investors’ twin fears of renewed recession in the United States, and the chaos that Europe’s sovereign debt crisis could inflict on the financial system if it continues unchecked.

European Central Bank policymakers said on Monday that officials were working to increase the firepower of the region’s rescue fund in their latest effort to staunch a crisis that US President Barack Obama said was “scaring the world”.

US markets reacted positively, finishing more than 2 per cent higher on Monday, and the mood continued in Asia, where Tokyo’s Nikkei rose 1.6 per cent, coming off its lowest close in more than two years.

MSCI’s broadest index of Asia Pacific shares outside Japan rose 1.5 per cent, after plumbing its lowest levels in 16 months on Monday.

“Markets are getting more confident around some action plan in Europe, which is positive, but on the other side, markets are also looking for more policy easing from the ECB, which is negative,” said Greg Gibbs, currency strategist at RBS in Sydney.

“The combination of both will leave the euro caught in the middle somewhere.” - Reuters