Asian stocks (MXAP), the South Korean won and copper rose on speculation European leaders will agree on steps to ease the region’s debt crisis at a summit tomorrow. Australia’s shares and currency gained after economic growth beat estimates.
The MSCI Asia Pacific Index increased 1.1 percent as of 1:59 p.m. inTokyo, the seventh advance in eight days. Standard & Poor’s 500 Index futures climbed 0.4 percent. The S&P/ASX 200 Index of Australian shares added 0.7 percent and the so-called Aussie rose 0.2 percent. Copper gained 0.6 percent and South Korea’s won appreciated against all 16 major counterparts.
Standard & Poor’s warning this week on the debt ratings of 15 euro-area governments will spur European leaders to ratchet up efforts at a summit starting tomorrow, German Finance Minister Wolfgang Schaeuble said yesterday. Greek Prime Minister Lucas Papademos received parliamentary approval for the 2012 budget, seeking to cut the deficit to 5.4 percent of gross domestic product.
“There is an expectation in the market that Europe will advance measures to overcome the debt issues,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. “Investors still want to see the results of meetings this week of the European Union and European Central Bank.”
The euro advanced 0.1 percent to 104.29 yen, ending a three-day drop. A German-French push for closer economic ties in Europe won the backing of U.S. Treasury Secretary Timothy F. Geithner, who urged governments to work with central banks to erect a “stronger firewall” to end the debt crisis. The European Central Bank will probably cut the benchmark interest rate by a quarter point to 1 percent when policy makers meet tomorrow, according to 58 economists in a Bloomberg survey.
Asian economies are withstanding Europe’s debt crisis so well that some investors are positioning for rating upgrades in the region. Five-year credit-default swaps for China, South Korea, Indonesia, Malaysia, the Philippines and Thailand climbed an average 63 basis points to 161 this year, while contracts for 17 eurozone countries, excluding Greece, jumped 118 to 301.
The Markit iTraxx Asia index of 40 investment-grade borrowers outsideJapan fell one basis point to 194.5 basis points in Hong Kong, Credit Agricole SA (ACA) prices show.