Asian stocks surged Tuesday but shares in Europe hit a snag as hopes that the continent is ready to resolve its sovereign debt crisis once and for all began to fade.Oil prices hovered below $85 a barrel while the dollar strengthened against the euro but slipped against the yen.
European shares fell in early trading, as jittery markets awaited a vote by Slovakia's government to approve the expansion of the European Union's bailout fund for strapped governments. Slovakia is the only country out of 17 nations using the euro that has yet to approve the measure.
Britain's FTSE 100 fell 0.7 percent to 5,363.44. Germany's DAX lost 0.6 percent to 5,811.09 and France's CAC-40 slid 1 percent at 3,131.27.
Wall Street was also set to fall. Dow Jones industrial futures fell 0.4 percent to 11,325 and S&P futures dropped 0.5 percent to 1,185.10.
Asian shares ended the day higher, boosted by a pledge by European leaders over the weekend to protect the region's banks from the debt crisis — and by Beijing's move to buy shares of major Chinese lenders.
Japan's Nikkei rose 2 percent to close at 8,773.68. Hong Kong's Hang Seng shot up 2.4 percent to 18,141.59. South Korea's Kospi rose 1.6 percent to 1,795.02, and Australia's S&P/ASX 200 added 0.6 percent to 4,227.60.
China's Shanghai Composite Index rose 0.2 percent to 2,348.52, a day after a government investment fund announced it had bought shares in major banks, helping to bolster the country's sagging stock market.
China's four biggest state banks soared after Central Huijin Investment Ltd., an arm of the sovereign wealth fund China Investment Corp., said late Monday that it bought shares in the Industrial & Commercial Bank of China, Agricultural Bank of China, Bank of China and China Construction Bank and that it would continue its market-support operations. It didn't say how many shares it had purchased.
The banks' Hong Kong-listed shares showed significant gains. ICBC climbed 6.7 percent, Agricultural Bank shot up 12.8 percent, Bank of China gained 7.7 percent and China Construction Bank added 5.8 percent.
Stocks markets on Monday were rejuvenated by signs that Europe was preparing serious steps to provide banks with the capital cushions necessary to withstand a possible debt default by Greece. Investors have been worried that European leaders weren't moving quickly enough.
German Chancellor Angela Merkel and French President Nicolas Sarkozy said Sunday that they would finalize a comprehensive response to the debt crisis by the end of the month.
But no details of the plan were released, and analysts cautioned against being too hopeful that a simple solution free of pain to financial institutions, investors or governments was imminent.
"Ultimately, we have to see something concrete from the European Union before we are more comfortable," said Derek Cheung, chief investment officer at Neutron INV Partners Ltd. in Hong Kong. Current market gains are simply "short-term excitement."
A default could cause the value of Greek bonds held by European banks to plunge, hurting their balance sheets. U.S. banks would also be affected if Greece goes through a messy default, since they own Greek bonds and also have close ties to European banks.
In Tokyo, a pause in the yen's appreciation against the euro helped export shares, Kyodo news agency reported, citing stock traders. Honda Motor Corp. jumped 5.5 percent while electronics giants Sony Corp. and Sharp Corp. rose 5.7 percent and 4.5 percent respectively.
Among the most active shares on South Korea's Kospi were Dongyang Steel Pipe Co., up 2.8 percent; and Samyang Optics, up 7.5 percent. Steel giant POSCO rose 2.9 percent.
The gains in Asia followed a strong rally on Wall Street on Monday.
The Dow Jones industrial average soared 330 points, or 3 percent, its biggest one-day gain since Aug. 11. The Dow closed at 11,433.18 — the highest since Sept. 16. The Standard & Poor's 500 index rose 3.4 percent to 1,194.89, while the Nasdaq composite index rose 3.4 percent to 2,566.05.
Benchmark crude for November delivery was down 54 cents at $84.86 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $2.43 to settle at $85.41 in New York on Monday.
Brent crude was down $1.30 at $105.35 a barrel on the ICE Futures Exchange in London.
In currencies, the euro fell to $1.3621 from $1.3650 late Monday in New York. The dollar fell slightly to 76.67 from 76.69 yen.
European shares fell in early trading, as jittery markets awaited a vote by Slovakia's government to approve the expansion of the European Union's bailout fund for strapped governments. Slovakia is the only country out of 17 nations using the euro that has yet to approve the measure.
Britain's FTSE 100 fell 0.7 percent to 5,363.44. Germany's DAX lost 0.6 percent to 5,811.09 and France's CAC-40 slid 1 percent at 3,131.27.
Wall Street was also set to fall. Dow Jones industrial futures fell 0.4 percent to 11,325 and S&P futures dropped 0.5 percent to 1,185.10.
Asian shares ended the day higher, boosted by a pledge by European leaders over the weekend to protect the region's banks from the debt crisis — and by Beijing's move to buy shares of major Chinese lenders.
Japan's Nikkei rose 2 percent to close at 8,773.68. Hong Kong's Hang Seng shot up 2.4 percent to 18,141.59. South Korea's Kospi rose 1.6 percent to 1,795.02, and Australia's S&P/ASX 200 added 0.6 percent to 4,227.60.
China's Shanghai Composite Index rose 0.2 percent to 2,348.52, a day after a government investment fund announced it had bought shares in major banks, helping to bolster the country's sagging stock market.
China's four biggest state banks soared after Central Huijin Investment Ltd., an arm of the sovereign wealth fund China Investment Corp., said late Monday that it bought shares in the Industrial & Commercial Bank of China, Agricultural Bank of China, Bank of China and China Construction Bank and that it would continue its market-support operations. It didn't say how many shares it had purchased.
The banks' Hong Kong-listed shares showed significant gains. ICBC climbed 6.7 percent, Agricultural Bank shot up 12.8 percent, Bank of China gained 7.7 percent and China Construction Bank added 5.8 percent.
Stocks markets on Monday were rejuvenated by signs that Europe was preparing serious steps to provide banks with the capital cushions necessary to withstand a possible debt default by Greece. Investors have been worried that European leaders weren't moving quickly enough.
German Chancellor Angela Merkel and French President Nicolas Sarkozy said Sunday that they would finalize a comprehensive response to the debt crisis by the end of the month.
But no details of the plan were released, and analysts cautioned against being too hopeful that a simple solution free of pain to financial institutions, investors or governments was imminent.
"Ultimately, we have to see something concrete from the European Union before we are more comfortable," said Derek Cheung, chief investment officer at Neutron INV Partners Ltd. in Hong Kong. Current market gains are simply "short-term excitement."
A default could cause the value of Greek bonds held by European banks to plunge, hurting their balance sheets. U.S. banks would also be affected if Greece goes through a messy default, since they own Greek bonds and also have close ties to European banks.
In Tokyo, a pause in the yen's appreciation against the euro helped export shares, Kyodo news agency reported, citing stock traders. Honda Motor Corp. jumped 5.5 percent while electronics giants Sony Corp. and Sharp Corp. rose 5.7 percent and 4.5 percent respectively.
Among the most active shares on South Korea's Kospi were Dongyang Steel Pipe Co., up 2.8 percent; and Samyang Optics, up 7.5 percent. Steel giant POSCO rose 2.9 percent.
The gains in Asia followed a strong rally on Wall Street on Monday.
The Dow Jones industrial average soared 330 points, or 3 percent, its biggest one-day gain since Aug. 11. The Dow closed at 11,433.18 — the highest since Sept. 16. The Standard & Poor's 500 index rose 3.4 percent to 1,194.89, while the Nasdaq composite index rose 3.4 percent to 2,566.05.
Benchmark crude for November delivery was down 54 cents at $84.86 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $2.43 to settle at $85.41 in New York on Monday.
Brent crude was down $1.30 at $105.35 a barrel on the ICE Futures Exchange in London.
In currencies, the euro fell to $1.3621 from $1.3650 late Monday in New York. The dollar fell slightly to 76.67 from 76.69 yen.
