Asia stocks edge up; Esprit soars, StanChart sinks
HONG KONG (MarketWatch) -- Asian stocks climbed Tuesday, extending recent gains on mounting hopes that the European Central Bank may buy Spanish and Italian bonds to ease debt-related stresses in the euro zone.
After gaining 2% the previous day, the Japanese Nikkei Stock Average (100000018) advanced 0.9% and Australia's S&P/ASX 200 Index (XJO) gained 0.4%.
Hong Kong's Hang Seng Index (HSI) rose 0.4%, as
Lagging behind, South Korea's Kospi (SEU) and Taiwan's Taiex (Y9999) and China's Shanghai Composite Index (000001) each rose 0.1%.
Recent optimism that the European Central Bank would soon start to buy up Spanish and Italian government bonds got a further boost Monday, after German Chancellor Angela Merkel's government said it supported the ECB's bond-purchasing program.
"There's evidence that the Bundesbank [which opposes such bond buying] is looking increasingly isolated," said Shane Oliver, head of investment strategy and chief economist at AMP Capital, referring to the German central bank.
"Investors have a more positive view on the ECB plan," he said, describing as "ridiculous" last week's sell-off in global stocks after the central bank belied hopes it may announce an immediate policy action. "What the ECB said was significant," Oliver said, noting that the bank had left the door open for quantitative easing and for levering up Europe's rescue funds.
The gains in Asia came after U.S. stocks on Monday ended at their best level in three months. Read more on U.S. stocks.
Among Hong Kong gainers, apparel firm Esprit Holdings Ltd. (330) (ESHDF) shot up 28% -- its best percentage gain since Jan. 1998 -- after it named Inditex SA's distribution and operations chief, Jose Manuel MartÃnez Gutiérrez, as its new chief executive. Spain's Inditex (ITX) owns the Zara fashion brand.
"Here they have appointed someone with good sector experience," said Andrew Sullivan at Piper Jaffray.
Esprit's shares were savaged in June, following the resignation of its chairman and chief executive in quick succession.
Also in Hong Kong,
On the downside, shares of Standard Chartered PLC (SCBFF) (2888) plummeted 14.9% after a New York state regulator alleged the bank "schemed" with Iran and hid transactions worth at least $250 billion. The regulator threatened to cancel the bank's license in the state. Standard Chartered said it "strongly rejects" the allegations. Read more on Standard Chartered allegations.
Losses for StanChart accelerated in afternoon trading, after the bank's London-listed shares suffered a double-digit loss, a day after they sank 6.2% in European trading.
Insurance giant China Life Insurance Co. (2628) lost 1.2% after it said Monday that it expects its first-half net profit to fall "significantly" from a year earlier. Read more on China Life.
Oil-related firms were propped up as Nymex crude-oil futures climbed overnight and remained near the $92-a-barrel level in Asian electronic trading.
Shares of Nippon Telegraph & Telephone Corp. (9432) (NTT) rose 1.4% in Tokyo after posting a modest 2% year-on-year increase in April-June profit.
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