Thursday, September 8, 2011

ASIA-Shares to follow Wall St. higher

WELLINGTON: Asian stocks look set to follow Wall Street higher on Thursday, relieved by a court ruling that backed the German government's efforts to bail out the crisis-stricken euro zone.

Wall Street's main indexes closed between 2.5 percent and 3.0 percent higher, reversing three days of losses.

Financial stocks rebounded sharply, with the KBW Bank Index up nearly 6 percent. Bank of America Corp jumped 7 percent, helped by a management shake-up.

Asian stocks listed on Wall Street gained 2.5 percent, world stocks, as measured by the MSCI world equity index, rose 2.7 percent, a day after hitting its lowest level since Aug. 22.

European stocks closed up 3.1 percent, which British shares mirrored on bargain hunting in banks and commodities shares.

Investor demand for risky assets perked up after the favourable German court ruling, although the court also gave its parliament a greater say over bailouts, which may complicate Germany's ability to act decisively if the debt crisis worsens.

The improved sentiment for risky assets resulted in the euro and oil rising, but falls for gold and bonds.

Japanese stocks, which climbed 2 percent on Wednesday on short-covering after three days of losses, may recover further, as the Nikkei futures traded in Chicago are 85 points above the close in Osaka.

Australian shares are also seen opening higher, with the share price index futures up 1 percent to a 56.6-point premium to the underlying S&P/ASX 200. ' Reuters


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