Asian stocks set best week in 6 months
Singapore, June 18, 2010
Asian stocks on Friday ended their best week in six months as investors regained an appetite for risk and brushed aside European debt concerns, while the euro hovered near three-week highs against the dollar.
European stock index futures pointed to a higher open with stocks poised an eighth session of gains. Higher shares in Asia following Thursday's modest gains on Wall Street boosted investor hopes of further gains.
US crude futures extended losses as weak US economic indicators raised doubts about the sustainability of an acceleration in demand growth by top oil consumer, the US.
"Emerging Asian economies were not at the centre of the financial crisis, as were the United States and more recently southern Europe," Clemens Kang, a strategist at Woori Investment & Securities in Seoul.
"Their distance from troubled regions helped them recover as fast as they did. Also these economies' comparatively robust rate of economic growth attracted investors."
MSCI's index of Asian shares outside Japan rose 3.6 percent during the week as of 0600 GMT, the biggest weekly percentage rise since the first week of December last year, after a 0.4 percent gain the previous week.
On Friday, the index rose as much as 0.9 percent to hit a one-month intraday high of 394.94 points before settling back slightly. Hong Kong, Australian and South Korean stocks rose, while Taiwanese and Chinese shares lost.
While global markets have moved off lows seen in May and some technical chart patterns look more positive, analysts are unsure if stocks can stage a convincing recovery in coming months as worries about Europe and the US economy linger.
Volumes have been thin, indicating investors are not confident yet that shares can gain much traction.
EPFR Global said in a report on Friday the Global Emerging Markets Equity Funds took in $1.78 billion, an 11-week high, while Asia ex-Japan Equity Funds snapped a five-week outflow streak and EMEA Equity Funds posted a second consecutive week of inflows.
US stocks had ended slightly higher as investors bought defensive shares, but important indexes were lower for much of the day, weighed by weak manufacturing and jobless claims data.
Though most economists do not expect the US economy to slide back into recession, investors fear second half growth may be tepid, curbing corporate profits.
The euro hit a new three-week high of $1.2416 and held firm at $1.2392 by late afternoon, as investors liquidated short positions after Spanish bond auctions drew robust demand.
Madrid had to pay a hefty premium to sell the bonds compared with previous issues, indicating investors remain concerned about whether euro zone countries with shaky finances will be able to meet their debt obligations. - Reuters