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Asia stocks rise on talk of U.S., European stimulus; Nikkei up 0.65%

Published 07/29/2012, 10:58 PM
Updated 07/29/2012, 11:01 PM
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Investing.com - Asian stocks rose Monday on building sentiments that both the U.S. Federal Reserve and the European Central Bank will loosen monetary policy this week to spur recovery, which would weaken the dollar and the euro and send stocks worldwide gaining.

During Asian trading on Monday, Hong Kong's Hang Seng Index was up 1.49%, Australia's S&P/ASX200 was up 0.82%, while Japan’s Nikkei 225 Index was up 0.65%.

Later this week, the Federal Reserve will meet to discuss interest rates and monetary policy while the European Central Bank will do likewise.

The U.S. economy grew 1.5% in the second quarter of this year, and while in line with expectations, the figure did suggest the economy may need a jolt from the Fed, possibly via quantitative easing, which are bond purchases from banks that pump liquidity into the economy, keep borrowing costs down and encourage investing and hiring.

Other tools remain on the table as well, including incentivizing banks not to stash their money in Fed accounts but to lend it out instead, the end effect of which would send stocks rising.

Also this week, the European Central Bank is set to meet and may loosen policy as well either through rate cuts or by offering low-cost loans to banks, known as long-term refinancing operations.

Meanwhile in Japan, industrial production in fell unexpectedly last month.

The Ministry of Economy, Trade and Industry reported that industrial production fell to a seasonally adjusted -0.1% in June from -3.4% in May.

Analysts had expected industrial production to rise 1.5% last month.

Investors largely shrugged off the news.

Both the U.S. and the eurozone will release unemployment data this week, which further fueled sentiments policy actions are on the way.

In Hong Kong, top gainers included China Shenhua, up 3.63%, Esprit Holdings, up 3.29%, and Sino Land, up 3.00%.

In Australia, top gainers included Coalspur Mines, up 9.45%, Iluka Resources, up 7.01%, and Eldorado Gold, up 5.89%,

European stock futures indicated a lower opening.

France's CAC 40 futures pointed to a loss of 0.30%, while Germany's DAX 30 futures signaled a loss of 0.48%. Meanwhile, in the U.K., the FTSE 100 futures indicated a loss of 0.01%.
Dow Jones Industrial Average futures were down 0.20% while the S&P 500 futures were down 0.28%.

All eyes this week will focus on the Federal Reserve and the European Central Bank and their respective statements on monetary policy.
 






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