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Asia stocks gain amid signs of progress in Europe

business Updated: Nov 11, 2011 08:01 IST
Hang Seng

Asian stock markets were mostly higher on Friday following signs of progress in debt plagued Europe - a successful bond sale in Italy and the naming of a new leader in Greece.

Hong Kong's Hang Seng gained 0.4% to 19,035.94 and South Korea's Kopsi added 1.2% to 1,835.34. Australia's S&P/ASX 200 rose 0.2% at 4,251.70. Benchmarks in Singapore, Taiwan and New Zealand also rose.

After opening higher, Japan's Nikkei 225 index slipped 0.1% to 8,492.36,

Investors were calmed after Greece - which is struggling to pull back from the brink of bankruptcy - named Lucas Papademos, a respected economist, as its new prime minister on Thursday.

An additional sign of stability came after Italy was able to borrow $6.8 billion at lower interest rates than analysts expected. On Wednesday, the rise in Italy's 10-year bond yield to well over 7% stoked panic in financial markets that the country was heading toward a Greece-style debt crisis.

Traders are also fretting that debt troubles in Italy and Greece could blow up into a massive liquidity crisis and lead to a global financial meltdown.

In New York on Thursday, the Dow Jones industrial average rose 1% to close at 11,893.86. It plunged 389 points on Wednesday after Italy's borrowing rates soared and talks in Greece to name a new prime minister broke down.

Positive economic data from the US also boosted hopes that the world's No. 1 economy would avoid a double dip recession.

The Labor Department reported early Thursday that the number of people applying for unemployment benefits in the US fell to 390,000 last week - the fewest since April. The data suggested layoffs are easing and that the economy grew slightly better over the summer than estimated.

The S&P 500 index gained 0.9% to 1,239.70. The Nasdaq rose 0.1% to 2,625.15.