Tuesday, August 16, 2011

ASIA-Shares to head higher as sentiment improves

WELLINGTON: Asian stocks look set for a positive start on Tuesday as solid gains on major global markets and a large takeover deal further bolstered confidence in risky assets.

The main Wall Street indices rose for a third consecutive session, gaining around 2 percent and erasing the losses of the previous week.

The markets were buoyed by Google Inc's offer to buy Motorola Mobility Holdings Inc for about $12.5 billion. Shares of other cell phone companies also rose, riding hopes of additional takeovers or the possibility of business shifting to Google's competitors.

Data showed manufacturing in New York State fell for a third month in a row in August as factory orders hit their lowest level since November 2010.

Separately, the U.S. Treasury reported that foreigners unloaded U.S. assets in June for a second straight month and were net sellers of Treasury securities for the first time in more than two years as concern about a U.S. credit downgrade soured overseas demand.

Asian stocks listed on Wall Street rose 2.3 percent while world stocks, as measured by the MSCI world equity index, rose 2.1 percent.

British shares rose 0.6 percent while European shares gained 0.1 percent, with mobile phone maker Nokia jumping after the Google offer for Motorola.

Analysts described equity markets as jittery and hoping there will not be significant bad news, but with an expectation that trading will be much less volatile.

The Swiss franc fell to a two-week low against the euro and dollar on speculation the Swiss National Bank may soon set an exchange-rate target this week, while the euro ''rose to nearly three-week highs against the dollar.

French President Nicolas Sarkozy and German Chancellor Angela Merkel meet later on Tuesday to discuss the euro zone's debt crisis, raising hopes of some positive outcome.

Japanese markets, which posted their biggest daily gain in two months on Monday, are set for further gains. Nikkei futures traded in Chicago 85 points above the last closing level in Osaka.

Australian stocks are also set for more gains, with share price index futures up 0.6 percent to be 12.1 points above the close of the underlying S&P/ASX 200 index. ' Reuters

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