World Stocks Mixed Amid Greek Debt Talks

Published January 20, 2012 9:27AM (EST)

BANGKOK (AP) — Asian stock markets rose Friday amid signs that the U.S. economy was picking up steam, but European shares opened lower as nervous traders awaited results of crucial negotiations between debt-mired Greece and its lenders.

Benchmark oil hovered above $100 per barrel while the dollar rose against the euro and the yen.

European stocks fell in early trading. Britain's FTSE 100 shed 0.1 percent to 5,733.14 and Germany's DAX was 0.3 percent lower at 6,396.62. France's CAC-40 lost 0.5 percent to 3,306.20. Wall Street also appeared set to open lower, with Dow Jones industrial futures down 0.2 percent to 12,567 and S&P 500 futures shedding 0.3 percent to 1,306.50.

Critical negotiations were under way in Athens between the government and private creditors over a debt restructuring. Greece cannot afford to repay its debts and is trying to persuade its creditors to accept losses of at least 50 percent on billions of euros (dollars) in Greek bonds.

Failure to seal a deal would likely result in a financially disastrous default by Greece.

"For the moment, the market expects a deal to be made while downside risk still exists and any disappointment could end the week of rallies," Credit Agricole CIB in Hong Kong said in an email.

Signs out of the U.S. on Thursday indicating the U.S. economic recovery was on track powered Asian shares higher earlier in the day.

On the last trading day before Chinese New Year holidays begin Monday, the Shanghai Composite Index climbed 1 percent to 2,319.12. Japan's Nikkei 225 index rose 1.5 percent to close at 8,766.36. Hong Kong's Hang Seng added 0.8 percent to 20,110.37 and South Korea's Kospi jumped 1.8 percent to 1,949.89.

Strong U.S. corporate earnings boosted investor risk tolerance. IBM Corp.'s fourth-quarter earnings beat Wall Street expectations, while Bank of America and Morgan Stanley both reported results that were better than analysts were expecting.

That helped lift shares in Japan's major banks, including Mitsubishi UFJ Financial Group, which jumped 5.1 percent. Mizuho Financial Group was up 5.5 percent and Nomura Holdings surged 5.2 percent.

Another positive sign for the U.S. economy was data that showed a strengthening job market. The number of people seeking unemployment benefits fell last week to 352,000, the fewest since April 2008.

"The U.S. has better job figures and China's central bank pumped money into the banking system to provide money to cash-starved enterprises so they can pay new year bonuses. I think after the Chinese New Year, be prepared for a correction," said Francis Lun, managing director of Lyncean Holdings in Hong Kong.

Some Hong Kong-listed banks and insurers fell as investors sold shares to book profits ahead of the Lunar New Year, analysts said. The Industrial & Commercial Bank of China fell 1.1 percent. Ping An Insurance shed 0.8 percent.

Resources stocks advanced following strong gains in metals prices overnight.

Mining giant Rio Tinto Ltd. rose 1.2 percent. Fortescue Metals Group, Australia's third-biggest iron ore producer, gained 2.6 percent.

Benchmark crude for February delivery was down 4 cents at $100.35 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 20 cents to finish at $100.39 per barrel in New York on Thursday.

In currency trading, the euro fell to $1.2932 from $1.2936 late Thursday in New York. The dollar rose to 77.21 yen from 77.17 yen.

By Salon Staff

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