Asia stocks regain their footing after big losses
BANGKOK—Asian stock markets rose modestly Tuesday as a respite from major bad news gave investors the pluck to get back into riskier assets.
Traders brushed aside disappointing U.S. factory orders as falling bond yields for Spain and Italy boosted confidence that Europe can avoid a messy breakup of its currency union.
Japan's Nikkei 225 index rose 0.6 percent to 8,345.56. Hong Kong's Hang Seng added 0.9 percent to 18,339.31 and South Korea's Kospi gained 1 percent to 1,800.03. Benchmarks in Singapore, Taiwan, mainland China and Indonesia also rose.
In Europe, bond investors appeared less concerned about the finances of some of the region's financially troubled countries. Bond yields fell for Italy and Spain, meaning that they appear less likely to default. Lower bond yields translate into decreased borrowing costs for those debt-strapped nations.
Global markets plunged Monday amid fears of a recession after a disappointing report on U.S. hiring and employment in May.
American employers added just 69,000 jobs in May, the fewest in a year, and the unemployment rate increased to 8.2 percent from 8.1 percent. Economists had forecast a gain of 158,000 jobs. The report is considered the most important economic indicator each month.
Adding to the evidence of a slowdown, new figures released Monday showed companies placed fewer orders to U.S. factories for the second straight month.
In Spain, meanwhile, investors are waiting for what the government intends to do to boost the finances of some of its ailing banks. The worry is that the government is already strapped for cash and might be overwhelmed by the costs of rescuing its own banks. It might have to tap European Union rescue funds, but it is reluctant to do so because such aid would come with conditions on the government's policies.
Meanwhile in Cyprus, the central bank governor said the country is struggling to find (EURO)1.8 billion to inject into its second-largest lender, Cyprus Popular Bank, by a June 30 deadline. That means it is increasingly likely to have to accept EU rescue funds. The chairman of Cyprus Popular Bank also suggested an EU loan now seemed more likely.
Benchmark oil for July delivery was up 87 cents to $84.85 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 75 cents to settle at $83.98 in New York on Monday.
In currencies, the euro rose to $1.2532 from $1.2494 late Monday in New York. The dollar was nearly unchanged at 78.33 yen.