Sunday, 10 June 2012

Asia stocks, euro rise as Spain banks get lifeline

By Pamela Sampson / AP Business Writer 
June 11, 2012

BANGKOK—Asian stocks and the euro climbed Monday after Spain sought a lifeline for its ailing banks, easing fears that Europe's debt crisis was about to spin out of control.

Spain on Saturday asked finance ministers from the 17 countries that use the euro to rescue its banks, which have been crushed by bad real estate loans. They responded by offering up to $100 billion euros ($125 billion) in credit that the Spanish government could funnel to banks.

Japan's Nikkei 225 index jumped 1.9 percent to 8,622.58. South Korea's Kospi added 1.6 percent to 2,553 and Hong Kong's Hang Seng climbed 2 percent to 18,874.23.

Benchmarks in Singapore, Taiwan, mainland China, Indonesia and New Zealand also rose.

In currency trading, the euro rose to $1.2633 from $1.2507 late Friday in New York. It rose to 100.49 yen from 99.50 yen.

Adding to the improved trading mood was better-than-expected data over the weekend that showed China's exports jumped in May from a year earlier.

The next key date for the euro currency union is Sunday, when Greek voters head to the polls in an election likely to determine whether the debt-mired country will stick with the common currency.

"Market sentiment has improved on the back of the announcement of Spanish bank aid and a less worrying set of numbers out of China over the weekend," analysts at Credit Agricole CIB in Hong Kong said in a market commentary.

But the newfound sense of optimism in markets is likely to fade as the Greek election nears, they said.
Spain is the fourth euro nation to seek a rescue. A financial crisis has gripped Spain since 2008, when a real estate bust caused big losses for many banks.

A Spanish bank rescue fund set up in 2009 was running out of money, and the government has already nationalized Bankia, a major bank. The rescue plan aims to calm investors by taking bank losses out of the equation.

Benchmark oil for July delivery was up $2.03 to $86.14 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 72 cents to end at $84.10 per barrel on the Nymex on Friday.

© Copyright 2012 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.