Asia stocks gain as earnings, China trade weighed
KAY JOHNSON (AP Business Writer)
BANGKOK (AP) — Asian stock markets made small gains Wednesday as investors weighed expectations of robust U.S. corporate earnings against weak trade figures from China.
Tokyo's Nikkei 225 index was up just 0.1 percent to 14,489.90 and Hong Kong' Hang Seng gained 0.4 percent to 20,766.41.
Most other regional markets rose by less than 1 percent, with Australia's S&P/ASX up 0.8 percent to 4,919.20, Taiwan's Taiex gaining 0.6 percent to 8,020.56 and China's Shanghai Composite up 0.3 percent to 1,951.85. South Korea's Kospi was down 0.2 percent to 1,926.15.
While good economic news out of the U.S. has sparked gains in some markets this week, Asian stocks continue to be weighed down by signs that China's era of breakneck economic growth above 10 percent is over.
In a new sign of weakness in the world's second-largest economy, China's exports fell by 3.1 percent in June compared with a year earlier and imports contracted by 0.7 percent, customs data showed Wednesday.
China's economic expansion is expected to slow further due to weak global demand and an effort by the Chinese central bank to cool a credit boom. The International Monetary Fund on Tuesday scaled back its China 2013 growth forecast to 7.8 percent from 8.1 percent.
In the U.S. and Europe, stocks have been buoyed by expectations that corporate earnings will remain at record levels and confirmation that Greece would get its next batch of bailout cash.
The Dow Jones industrial average rose 0.5 percent to 15,300.34 on Tuesday, while the broader S&P 500 index gained 0.7 percent to 1,652.32 — its best run in two months — and the Nasdaq composite rose 0.6 percent to 3,504.26.
Markets worldwide have largely recovered since U.S. Federal Reserve Chairman Ben Bernanke last month said that the central bank planned to reduce its monetary stimulus, prompting a global selloff.
The central bank is buying $85 billion in bonds a month to keep interest rates low and encourage borrowing and spending. That stimulus has been a major factor in driving global stock markets higher.
After a few weeks of volatile trading at the prospect of the stimulus being scaled back, investors now appear to be applauding the prevailing trend of improving U.S. economic news.
"Normality appears to have returned to the markets, with investors buying on good news and selling on bad," said Craig Erlam, market analyst at Alpari.
The consensus in the markets is now that the Fed will first reduce the amount of financial assets it buys in September.
Wednesday's expected publication of the minutes of the last Fed policy meeting in June and an ensuing speech by Bernanke will be monitored in that context.
Benchmark crude oil for August delivery was up 84 cents to $104.37 a barrel in electronic trading on the New York Mercantile Exchange, the highest level in more than a year.
In currencies, the euro remained nearly flat at $1.2776 for a second day while the dollar declined by 0.2 percent to 101.02 yen.