Markets rebound after UN fails to agree on use of force in Syria
Published Thursday, August 29, 2013 6:47AM EDT
BANGKOK, Thailand -- Global stock markets rebounded Thursday as jitters began to ease about a possible international military response to the Syrian conflict.
The U.S. appeared to be edging closer to intervention in Syria after Defence Secretary Chuck Hagel said Tuesday that American forces were ready to act on any order by President Barack Obama. But the prospect of an immediate multinational response diminished Wednesday after the UN Security Council's permanent members failed to agree to a proposal to use force against Syria.
Investors have been reducing exposure to Asia's emerging markets for several weeks, anticipating that the U.S. Federal Reserve will begin withdrawing its monetary stimulus. The sell-off accelerated this week when the U.S. said it had proof that chemical weapons had been used against civilians in Syria's civil war.
The respite in tensions sent investors on a bargain-hunting spree.
"The market already had a significant drop," said Linus Yip, strategist at First Shanghai Securities in Hong Kong. "So I think for some traders, it's a good time to bet."
In early European trading, Britain's FTSE 100 rose 0.7 per cent to 6,475.45. Germany's DAX advanced 0.4 per cent to 8,193.73. France's CAC-40 added 0.4 per cent to 3,976.58. Wall Street futures signalled a higher open. Dow Jones futures rose 0.3 per cent to 14,848. S&P 500 futures rose 0.3 per cent to 1,637.20.
Asian stocks also posted solid gains. Japan's Nikkei 225 index rose 0.9 per cent to close at 13,459.71. South Korea's Kospi advanced 1.2 per cent to 1,907.54. Hong Kong's Hang Seng rose 0.7 per cent to 21,704.78. Australia's S&P/ASX 200 gained 0.1 per cent to 5,092.40.
The benchmark PSE index in Manila rose 3.6 per cent after data showed the Philippine economy expanded by 7.5 per cent in the second quarter, one of Asia's fastest growing, as robust domestic spending insulated it from weak global demand.
"The most encouraging aspect of today's data was the continued strong growth in investment," said analysts at Capital Economics. "Recent improvements in the business environment as well as an ongoing clampdown against corruption should further support investment in the next couple of years."
Among individual stocks, energy shares rose sharply after oil prices hit a two-year high Wednesday. Japanese energy explorer Inpex Corp. jumped 5.2 per cent. PetroChina Co. rose 1.8 per cent.
Qantas Airways soared nearly 14 per cent after the Australia flag carrier reported a modest annual profit, a sign of recovery after a record loss the year before.
Benchmark oil for October delivery was down $1.10 to $109 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.09 to close at $110.10 a barrel on Wednesday, its highest finish since May 3, 2011.
In currencies, the euro fell to $1.3271 from $1.3337 late Wednesday. The dollar rose to 98.08 yen from 97.74 yen.