Markets in Asia boosted on higher eurozone confidence
By Danny McCord, AFP
October 18, 2012, 12:06 am TWN
HONG KONG--Asian markets were boosted Wednesday on increased confidence in the eurozone after Moody's held off cutting Spain's credit rating, while Madrid looked to move closer to asking for a bailout.
A successful bond auction for Greece added to the sense of optimism, while the euro maintained its gains seen in late trade Tuesday as investors sought out riskier assets.
Tokyo jumped 1.21 percent, or 105.24 points, to 8,806.55, Sydney added 0.82 percent, or 36.7 points, to 4,528.2 and Seoul was 0.7 percent higher, adding 13.61 points to 1,955.15.
Hong Kong rose 0.99 percent, or 209.57 points, to 21,416.64 and Shanghai was up 0.32 percent, or 6.81 points, at 2,105.62.
Moody's gave debt-addled Spain some much-needed room on Tuesday when it held the country's rating at Baa3, one notch above “junk,” citing the European Central Bank's willingness to buy government bonds to stabilize its borrowing rate.
It also pointed to Madrid's commitment to implementing fiscal and structural reforms necessary to improve its finances as well as efforts to restructure the banking sector and strengthen the banks. However, the agency kept it on a “negative outlook.”
Also, a senior Spanish official has said that Madrid was considering a request for a line of credit from Europe's European Stability Mechanism rescue fund, the Wall Street Journal reported.
The comments soothed investors fears over Spain as Prime Minister Mariano Rajoy has so far refused to ask for help, despite the parlous state of the economy, saying he wanted to study the terms of a rescue.
“The latest headlines from Madrid imply that a formal request for aid is inevitable,” said Ashraf Laidi, chief global strategist at City Index.