Asia Stocks up as US Central Bank Meets - ABC News Asia Stocks up as US Central Bank Meets - ABC News

Wednesday, June 20, 2012

Asia Stocks up as US Central Bank Meets - ABC News

Asia Stocks up as US Central Bank Meets - ABC News

Asian stock markets rose Wednesday amid hopes that the Federal Reserve would announce measures to stimulate the U.S. economy.

Analysts say the U.S. central bank could announce new bond-buying plans or signal that a plan is in the works at the end of its two-day meeting which ends later in the day. The Fed has already launched two rounds of bond purchases to lower long-term interest rates.

Another option is to extend Operation Twist, under which the Fed has been gradually selling short-term Treasury securities and using the proceeds to buy longer-term bonds to keep their rates down. The current program is set to expire at the end of the month.

Japan's Nikkei 225 index rose 1.2 percent to 8,762.40. Hong Kong's Hang Seng added 0.8 percent to 19,559.37 and South Korea's Kospi gained 0.6 percent to 1,902.02.

Australia's S&P/ASX 200 added 0.2 percent to 4,131.50. Benchmarks in Singapore, Taiwan and Indonesia were also higher. Mainland China's Shanghai Composite Index fell. Benchmarks in Thailand and New Zealand were also lower.

"The market's risk-averse sentiment is easing, and investors have quite high hopes for central bankers to help," said Kwong Man Bun, chief operating officer at KGI Securities in Hong Kong. "Investors are now taking a breather before looking at the problem of Spain."

Spain's sharply rising borrowing costs have highlighted growing concerns that the country might eventually need foreign help to finance itself.

Worries about Spain's ability to repay its debt grew last week when the country agreed to accept a European loan of up to 100 billion euros to shore up its ailing banks. The fear is that the country's financing costs will overwhelm the government's budget as it tries to wade its way through a recession and a 24.4 percent jobless rate.

Hopes for Fed action helped banking shares. Japan's Nomura Holdings rose 2.9 percent and National Australia Bank Ltd. added 2.3 percent. Hong Kong-listed HSBC Holdings rose 2.4 percent.

Materials stocks also rose. Australia's BlueScope Steel Ltd. jumped 4.9 percent. Japanese steelmakers Kobe Steel Ltd. added 2.1 percent.

Stocks rose sharply on Wall Street Tuesday. The Dow Jones industrial average rise 0.8 percent to 12,837.33, its highest close in a month. The Standard & Poor's 500 index is up 1 percent to 1,357.98. The Nasdaq composite index rose 1.2 percent to 2,929.76.

Benchmark oil for July delivery was down 12 cents to $83.91 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose by 76 cents to end the day at $84.03 per barrel in New York on Tuesday.

In currencies, the euro fell to $1.2677 from $1.2689 late Tuesday in New York. The dollar fell to 78.89 yen from 79.04 yen.

Swedish stocks rise as Europe waits for Fed - Financial Times

June 20, 2012 1:31 pm

Pearl Jam's former financial manager charged with stealing from the band - The Guardian

A former member of Pearl Jam's management team has been charged with stealing $380,000 (£242,000) from the band.

Rickey Charles Goodrich was chief financial officer with Curtis Inc, the band's management company, when he is alleged to have taken money from the band's accounts. Prosecutors say he committed the theft beween 2006 and September 2010, when he was fired. He had begun working for Pearl Jam in 2005 and joined Curtis Inc the following year.

Goodrich has been charged with 33 counts of theft, and is expected to enter a plea on 28 June at his hearing at Seattle's King County Superior Court. Prosecutors say he transferred money from company accounts to pay debts he and his wife had accrued. He is also alleged to have used company credit cards to pay for personal items, including family holidays and wine.

The charging documents claim that hired investigators found Goodrich had claimed to have paid thousands of dollars to band-members and crew that remained unaccounted for. The band's manager had reviewed areas of their cash flow after becoming concerned by Goodrich's management of their money in late 2009.

According to the Seattle Post-Intelligencer, police claim the thefts cost the management company $556,000 (£354,000), including investigative expenses. Kelly Curtis of Curtis Management said, "We are deeply saddened by this situation," but added that he is "looking forward to a resolution".

Pearl Jam are due to headline the Isle of Wight festival this Saturday.

World stocks, euro edge higher ahead of Fed decision - Reuters India

LONDON | Wed Jun 20, 2012 5:36pm IST

LONDON (Reuters) - World shares and the euro edged higher on Wednesday, with investors waiting to see if the U.S. Federal Reserve will adopt further monetary stimulus to counter faltering economic growth.

Expectations have risen that the central bank will extend its bond-buying programme, dubbed "Operation Twist", after data pointed to weakness in the jobs market, and contagion fears from the euro zone crisis hit business activity.

After four days of gains before the conclusion of the U.S. Fed's two-day policy meeting, U.S. stocks were also poised for a mixed open on Wall Street but the gains have also left investors at risk of disappointment.

"There are expectations that the Fed will at least extend 'Twist' ... that is pretty much baked in," said Jeremy Stretch, head of currency strategy at CIBC World Markets.

"So there is a risk of disappointment if the Fed does not do anything."

The MSCI global equity index was up 0.2 percent to 311.12 for a gain of 1.8 percent this week.

The FTSE Eurofirst 300 index of top European shares was up 0.1 percent at 1,010.52 points after surging 1.6 percent to a one-month high in the previous session.

"Operation Twist is more likely than any measures in terms of printing new money or a further round of quantitative easing, but with bond yields as low as they are at the long end, I don't see that having much economic significance," said Gerard Lane, strategist at Shore Capital.

The 30-year benchmark U.S. Treasury bond was little changed in Europe on Wednesday, trading at a yield of 2.74 percent after starting the month at a low of 2.53 percent.


The pressure in sovereign debt markets was also easing on signs that euro zone leaders were moving towards a deal on a longer-term plan to resolve the region's nearly three-year-old debt crisis.

Speaking at a Group of 20 summit in Mexico, they said they aimed to launch a concrete plan to integrate the region's banking sectors at a summit next week with a goal of finalising a broad agreement by December.

A banking union would be a major step, long pressed for by the United States and other nations, in breaking the cycle of debt-laden countries bailing out their troubled banks only to find themselves even deeper in debt.

A proposal for the euro zone's new rescue fund, due to come into force next month, to be used to buy the debt of stricken euro-zone countries, such as Spain and Italy, was also due to be discussed at a meeting of euro finance ministers on Thursday.

The signs of progress in dealing with Europe's problems and the prospect of Fed action pushed Spanish and Italian bond yields down while safe-haven German government bond yields rose.

Spain's 10-year government bond yields were down 11 basis points at 6.93 percent, with the equivalent Italian debt 8 basis points lower at 5.84 percent.

A report that some hedge funds are positioning for a big turnaround in the Bund market after yields reached record low levels added to selling in German bonds, pushing the 10-year yield up five basis points to 1.58 percent.

The euro rose fractionally to trade around $1.27, adding to gains of nearly 1 percent in the previous session and within sight of a one-month high of $1.2748 hit on Monday.

The euro also gained some support from reports that Greek conservatives had succeeded in forming a coalition government. It will now try to persuade foreign lenders to allow more leeway in pushing through a deeply unpopular austerity programme.

The dollar was steady against a basket of currencies at 81.39 before the Fed announcement and near a one-month low of 81.186 hit on Tuesday.

"The weakness in the dollar is understandable but once that speculation is out of the way, and we know what the Fed are going to do, concerns about the euro zone will come back to the fore," said Simon Derrick, head of currency research at Bank of New York Mellon.


Commodity markets were also watching for outcome of the Fed meeting. Any stimulus could boost demand for a wide range of materials and enhance the role of precious metals as a hedge against inflation.

Spot gold was steady at $1,616.39 an ounce, eyeing its 2012 high of around $1,790 set in February when the Fed said it would keep interest rates near zero until the end of 2014.

"We think (Fed Chairman) Bernanke will talk up the Fed's readiness to act if required and there is a chance of a policy gesture - an extension to Operation Twist perhaps," said Nick Trevethan, senior metals strategist at ANZ in Singapore.

Brent crude was steady at under $96 a barrel, but prices were close to 17-month lows as investors focused on the dimming outlook for global fuel. U.S. July crude, which expires on Wednesday, dipped 9 cents at $83.94 per barrel. (Additional reporting by Anirban Nag.; Editing by Anna Willard and Elizabeth Piper)

History points to Olympic boost for UK stocks - The Guardian

STOCKS NEWS EUROPE-Buying highest IBES scores in STOXX pays -DB - Reuters UK

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