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Asia stocks drift ahead of ECB meeting

February 16. 2013 10:20PM

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(AP) Asian stock markets drifted Thursday ahead of a European Central Bank meeting that analysts anticipate will announce a plan to support financially struggling European countries.

ECB President Mario Draghi is expected to unveil a new bond-buying program intended to bring down the high borrowing costs of Spain and Italy. Without some way to reduce the interest rates on the bonds they sell, the two nations could be pushed into asking for a bailout, following a path taken by Greece, Ireland, Portugal and Cyprus.

"It won't save Europe but it will keep Spanish yields and Italian yields down for now and give Europe's leaders another 3-6 months to come up with bigger and better plans for a real solution," said analysts at DBS Bank Ltd. in Singapore.

But analysts also expressed skepticism about whether the move was sufficient to resolve the debt crisis affecting the 17 nations that use the euro when the world's major economies are suffering sluggish growth.

"I do think reality is setting in, that there is only so much the ECB can do. At the end of the day, the macro data doesn't look great. So there's probably an inclination for the markets to drift until a lead comes in from the macro side," said Lorraine Tan, director at Standard & Poor's equity research in Singapore.

She said she didn't expect a big improvement in key economic data until the fourth quarter of 2012.

"If China starts to show better numbers that will make an impact. But we really don't expect to see too much change in the numbers until September data rolls around."

Japan's Nikkei 225 fell 0.1 percent to 8,667.70. Hong Kong's Hang Seng lost 0.2 percent to 19,110.22. But South Korea's Kospi gained 0.3 percent to 1,879.25, boosted by tech shares. Australia's S&P/ASX 200 rose 0.7 percent to 4,308.80.

Benchmarks in Singapore and Taiwan fell while those in Indonesia, Thailand and mainland China rose.

South Korean technology giant Samsung Electronics rose 0.8 percent after saying sales of its Galaxy S3 smartphones topped the 20 million mark since its release in late May. LG Electronics added 1.7 percent.

On Wall Street, U.S. stock prices closed mixed, held in check by a warning from the package delivery company FedEx that its profits would be hurt because of a slowdown in the global economy. The Dow Jones industrial average closed up 0.1 percent at 13,047.48.

The Standard & Poor's 500 index fell 0.1 percent to 1,403.44. The Nasdaq composite index lost 0.2 percent to 3,069.27.

Investors are also looking ahead to Friday's U.S. payrolls data for signs of life in the world's largest economy. Continued signs of weakness in the U.S. economy may help persuade the Federal Reserve to announce new action after its meeting next week.

Benchmark oil for October delivery was up 50 cents to $95.86 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 6 cents to finish at $95.36 per barrel on the Nymex on Tuesday.

In currencies, the euro rose to $1.2605 from $1.2599 late Wednesday in New York. The dollar rose to 78.43 yen from 78.41 yen.


Follow Pamela Sampson on Twitter at

Associated Press

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