Asia stocks up after Greece drops referendum plan
BANGKOK—Asian stock markets rose sharply Friday, a day after Greece's prime minister abandoned a referendum on the country's bailout and the European Central Bank cut interest rates in a surprise move.
Oil prices approached $94 a barrel amid signs the U.S. economy may be improving. The dollar was higher against the euro but lower against the yen.
Japan's Nikkei 225 index rose 1 percent to 8,732.32 and Hong Kong's Hang Seng jumped 3.4 percent to 19,900.93. South Korea's Kospi gained 2.7 percent to 1,920.82.
The gains reversed four straight days of losses starting Monday. That's when Greek Prime Minister George Papandreou shocked financial markets by unexpectedly announcing he would call a referendum on a European austerity plan aimed at restoring the country's solvency.
But markets remain jittery about how Europe will resolve its debt crisis. The risks to the region's economy were also a clear factor in the ECB's surprise decision Thursday to cut interest rates by a quarter of a percentage point to 1.25 percent.
Analysts expect economic growth in Europe to slow in the final three months of the year or even go into reverse.
Still, Greece's decision to call off the referendum allayed concerns that it would reject the bailout plan -- which could lead Greece into a massive debt default that could slam banks and other investors that were heavy purchasers of its bonds.
Buying fervor led to broad gains, including shares in airlines and heavy equipment. Hong Kong-listed Air China Ltd. jumped 5.6 percent, while Korean Air Lines Co. rose 2 percent. Japan's Komatsu Ltd., a world leader in equipment making, soared 6.5 percent.
Rising commodities prices, including industrial and precious metals, boosted mining shares. Zining Mining Group Co., China's largest gold miner, added 5.4 percent. Australia's BHP Billiton, the world's largest mining company, gained 3.7 percent. Fortescue Metals Group jumped 5.9 percent.
But Sony Corp., the Japanese electronics and entertainment conglomerate, tumbled 7.4 percent, after earlier this week reporting a 27 billion yen ($346 million) loss for the latest quarter and downgrading its annual earnings forecast, battered by the strong yen and poor sales of flat panel TVs.
Singapore Airlines dipped 0.4 percent after the company reported a drop of 49 percent in its second-quarter net profit from a year ago.
The developments in Europe on Thursday helped send Wall Street to a second day of big gains. The Dow Jones industrial average gained 1.8 percent to 12,044.47. The S&P 500 rose 1.9 percent to 1,261.15 and the Nasdaq composite added 2.2 percent to 2,697.97.
Reports on the U.S. economy also lifted stocks by lowering fears of a new recession. The number of people who applied for unemployment benefits last week dipped to the lowest level in five weeks. The number of applications fell below 400,000 for only the third time since April. Companies also made more orders to U.S. factories in September.
Benchmark crude for December delivery was down 26 cents to $93.81 in electronic trading on the New York Mercantile Exchange. The contract rose $1.56 to settle at $94.07 a barrel on Thursday, helped by the better U.S. and European news.
In currencies, the euro fell to $1.3807 from $1.3834 late Thursday in New York. The dollar slipped to 77.99 yen from 78.09 yen.