Asia Markets Rise After Reports of Korean Growth

Asia Markets Rise After Reports of Korean Growth
Copyright By THE ASSOCIATED PRESS
Published: October 26, 2009
http://www.nytimes.com/aponline/2009/10/26/business/AP-World-Markets.html?scp=3&sq=South%20Korean%20growth%20at%20seven-year%20high%20&st=cse


LONDON (AP) -- European markets rose modestly Monday as investors looked ahead to oil company earnings later in the week. Asian markets rose as South Korea's fastest growth in over seven years underscored the region's strengthening economic recovery.

In morning trading in Europe, Britain's FTSE 100 added 0.4 percent to 5,262.41, Germany's DAX jumped 0.8 percent to 5,786.63 and France's CAC 40 gained 0.5 percent to 3,826.63.

U.S. stocks faltered on Friday as investors dumped stocks and locked in profits after the glow of a week full of strong earnings reports faded.

But markets in Asia found new impetus after South Korea's central bank said economic growth accelerated to 2.9 percent in the third quarter from the previous quarter -- the fastest growth since the first quarter of 2002.

Asia's fourth-largest economy has been bolstered by government stimulus spending, low interest rates, and a falling won which boosts exports. Massive stimulus spending also played a part in China's economic growth accelerating in the third quarter, according to official figures last week.

''It's a full-fledged recovery in Korea,'' said David Cohen, chief of Asian forecasting at Action Economics in Singapore. He termed ''dramatic'' the economy's turnaround from the depths it hit late last year as the financial crisis unfolded.

Meanwhile, trade in Europe was subdued with little corporate news to digest. ''There is not a great deal of direction in the market,'' said Keith Bowman, analyst at Hargreaves Lansdown Stockbrokers, who added that attention was likely to turn to earnings reports from U.S. companies and others later in the week and U.S. gross domestic figures on Thursday.

''The oil sector moves into focus with Chevron and Exxon reporting in the States and we have got BP and Shell here in Europe,'' said Bowman.

A big loser across Europe was ING Groep NV, one of the world's largest financial services companies. Its stock plummeted 7 percent after it announced plans to sell or list its insurance and investment management arms and to issue euro7.5 billion ($11.3 billion) in new shares to repay state aid and bolster its finances.

European markets were helped higher by U.S. stock futures, which pointed to modest gains on Wall Street. Dow Jones industrial average futures rose 0.4 percent to 9,972, while Standard & Poor's 500 futures added 0.5 percent to 1,082.40.

Earlier, in Asia, Japan's Nikkei 225 stock average rose 79.63, or 0.8 percent, to 10,362.62 and South Korea's Kospi advanced 16.94, or 1 percent, to 1,657.11. Hong Kong's market was closed for a holiday.

China's Shanghai benchmark gained 0.1 percent in choppy trade as investors worried the government might temper its stimulus policies following the acceleration in third quarter growth. Taiwan's market rose 0.3 percent, Singapore's index gained 0.2 percent, and India's Sensex was up 0.6 percent.

Australia bucked the trend with the S&P/ASX 200 index falling 0.6 percent. In Sydney trade, coal miner Felix Resources Ltd. jumped 4 percent after the government approved a takeover by China's Yanzhou Mining Co.

In the U.S. on Friday, the Dow fell 109.13, or 1.1 percent, to 9,972.18. The S&P 500 index fell 13.31, or 1.2 percent, to 1,079.60. The Nasdaq fell 10.82, or 0.5 percent, to 2,154.47.

Oil prices slipped to near $80 a barrel in Europe after last week's jump to a 2009 high. Benchmark crude for December delivery fell 35 cents to $80.15 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 69 cents a barrel to settle at $80.50 on Friday.


AP Business Writers Stephen Wright in Bangkok and Kelly Olsen in Seoul contributed to this report.