Asia Stocks Rise On Hopes For Greece Debt Fix

Published February 15, 2012 3:00AM (EST)

BANGKOK (AP) — Asian stock markets rose Wednesday, swayed by a late-day rally on Wall Street, after Greece indicated a willingness to commit to spending cuts demanded by lenders in exchange for a bailout vital to the country's solvency.

Japan's Nikkei 225 index jumped 1.8 percent to 9,216.62. South Korea's Kospi gained 0.9 percent to 2,021.07 and Hong Kong's Hang Seng index added 1.3 percent to 21,182.38. Australia's S&P/ASX 200 index was up 0.3 percent at 4,256.40.

Markets found hope in reports quoting Greek government officials as saying party leaders would promise by Wednesday to implement deep spending cuts and other reforms.

That came after talks to extricate Greece from a two-year debt crisis appeared to unravel late Tuesday after European finance chiefs canceled a meeting to discuss a second international bailout for the country.

The meeting was called off after Athens failed to deliver on several demands made by its partners in the euro currency union. Greece needs a $171 billion (euro130 billion) bailout by March 20 to avoid a default that could rattle the world financial system.

The country has already passed some of the deep spending cuts its lenders were demanding but hasn't really satisfied anyone. Greeks have rioted, saying the cuts are too harsh, and Greece's neighbors have expressed concern that the cuts are not enough.

Downbeat economic news from Europe also undermined investor confidence. Greece said its economy shrank drastically at the end of last year, and Europe is expected to report Wednesday that the economies of the 17 countries that use the euro shrank 0.4 percent after growing 0.1 percent the quarter before.

Late Monday, Moody's also downgraded its debt ratings on six European countries, including Italy, Portugal and Spain. Moody's also said it might cut France, Austria and the U.K. as well.

News out of the U.S. was also disappointing. The Commerce Department said U.S. retail sales rose 0.4 percent last month, but analysts were expecting 0.7 percent.

Shares of Japanese computer chip maker Elpida Memory Inc. plunged 13.9 percent, after the company said Tuesday that talks were not going well with other companies on investments, loans and partnerships to improve its dire financial conditions.

The Dow Jones industrial average rose marginally to close at 12,878.28. The Standard & Poor's 500 index fell nearly 0.1 percent to close at 1,350.50. The Nasdaq composite index rose 0.4 points to close at 2,931.83.

Benchmark oil for March delivery rose 4 cents to $100.78 per barrel on the New York Mercantile Exchange. The contract fell 17 cents to finish at $100.74 per barrel on the Nymex on Tuesday.

In currency trading, the euro rose to $1.3145 from $1.3095 late Tuesday in New York. The dollar was unchanged at 78.47 yen. On Tuesday, the dollar rose to as high as 78.51 yen, its highest point since Nov. 1.

By Salon Staff

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