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Asia stocks rally on China’s Europe support pledge; Nikkei jumps 2.3%

Published 02/15/2012, 02:51 AM
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Investing.com - Asian stock markets rallied on Wednesday, as market sentiment improved after China signaled that it would increase its investment and support the euro zone, as investors awaited further developments surrounding Greece.

During late Asian trade, Hong Kong's Hang Seng Index surged 2.1%, Australia’s ASX/200 Index rose 0.25%, while Japan’s Nikkei 225 Index rallied 2.3%.

Asian equities added to strong gains after People’s Bank of China Governor Zhou Xiaochuan said his country was ready to be more involved in resolving the euro zone’s ongoing debt crisis through the European Financial Stability Facility and European Stability Mechanism.

The Nikkei rose to the highest level since August as exporters rallied on the back of a weaker yen a day after the Bank of Japan announced further stimulus measures to boost growth.

Consumer electronics giant Sony saw shares jump 5.7%, Fuji Film Holdings jumped 4.75%, while automakers Toyota and Honda climbed 4.65% and 3.3% respectively.

Shares in Japanese lenders also contributed to gains, with Mitsubishi UFJ Financial Group soaring 4.1% and Sumitomo Mitsui Financial Group gaining 4%.

On the downside, Elpida Memory shares plunged 14.4% to touch the lowest level since 2004, when it listed, after the company backtracked on earlier remarks and admitted that talks to solve its serious debt problems haven't been progressing as much as it expected.

Shares in Yahoo Japan slumped 3.7% on reports that the company’s talks with the parent of China’s Alibaba.com and with Japan’s Softbank over the sale of the firm’s Asian assets have fallen apart.

Elsewhere, property developers led shares in Hong Kong higher, continuing their recent run of gains.

China Overseas Land & Investment saw shares climb 3.6%, Sun Hung Kai Properties surged 4.25%, while Henderson Land Development saw shares rally 6.25%.

Raw material producers performed strongly, tracking oil and metal prices higher. Aluminum Corporation of China, or CHALCO, rose 4.15%, gold producer Zijin Mining gained 2.85%, while copper miner Jiangxi Copper Company soared 4.3%.

Looking ahead, the outlook for European stock markets was upbeat as investors continued to monitor developments surrounding Greece.

Euro zone finance ministers cancelled a meeting set for later in the day in Brussels and will hold a teleconference call instead to discuss the approval of Greece’s second bailout.

The EURO STOXX 50 futures pointed to a gain of 0.6%, France’s CAC 40 futures rose 0.65%, London’s FTSE 100 futures added 0.2%, while Germany's DAX futures climbed 0.75%.

Earlier in the day, official data showed that Germany’s economy contracted by a less-than-expected 0.2% in the final three months of 2011, while France’s economy expanded 0.2%, confounding expectations for a 0.2% contraction.

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