World stocks mostly up after Ireland bailout news

[November 22, 2010]  BANGKOK (AP) -- World stock markets were mostly higher Monday after debt-hobbled Ireland applied for a massive EU emergency loan to bail out its banking sector, easing fears Europe's debt woes will escalate.

Oil prices rose to near $83 a barrel, while the euro gained against the dollar. The yen also rose against the greenback.

In Europe, Britain's FTSE 100 was up 0.6 percent at 5,767.94 and Germany's DAX gained 0.8 percent to 6,897.30. France's CAC-40 added 0.9 percent to 3,895.34. Wall Street was set to go higher at the opening bell, with Dow futures up 0.4 percent to 11,220.

Japan's Nikkei 225 stock average closed 0.9 percent higher, or 92.80 points, at 10,115.19 and South Korea's Kospi rose 0.2 percent to 1,944.34. Australia's S&P/ASX 200 added 0.3 percent to 4,643.5. Benchmarks in India, Taiwan and Thailand also rose.

But Hong Kong bucked the trend, with the Hang Seng index falling 0.4 percent to 23,524.02 amid losses in property stocks after new measures to stem speculation. Singapore's benchmark also fell.

Chinese shares closed mixed in weak trading, as investors awaited further policy moves from the central government's upcoming economic work conference after inflation last month hit a 25-month high.

The benchmark Shanghai Composite Index slipped 0.2 percent to 2,884.37. The Shenzhen Composite Index for China's smaller, second exchange climbed 1.2 percent to 1,313.57.

World markets posted gains after weekend talks to bail out Ireland's financial sector, which was decimated after the country nationalized three of its six banks following the collapse of a real estate boom.

European Union finance ministers quickly agreed in principle to the bailout, saying it "is warranted to safeguard financial stability in the EU and euro area." All sides said Sunday that further negotiations loomed.

Irish Finance Minister Brian Lenihan said Ireland needed less than $140 billion to use as a credit line for its state-backed banks, which are losing deposits and struggling to borrow funds on open markets. He said the loan facility could last anywhere from three to nine years. The International Monetary Fund also said it was prepared to offer loan assistance.

Ireland has been brought to the brink of bankruptcy by its fateful 2008 decision to insure its banks against all losses -- a bill that is swelling beyond $69 billion and driving Ireland's deficit into uncharted territory.

In Hong Kong, property stocks took a hit from measures to tame speculation and surging home prices, such as new taxes on properties resold within 24 months and higher down payment requirements.

"The financial secretary introduced some tough measures to cool down the property market and that depressed property stocks," said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong.

Analysts at Citigroup said they believed the measures would make property investments "less attractive."

"The measures announced are tougher than market and our expectations and it shows the HK government is very determined to control the surging home price," Citigroup said in a research note. "We believe all these measures will have a negative impact on speculators and short-term investors. Residential-focus developers like Sino Land will be hurt most."

On Friday in New York, stocks posted slight gains after China took more steps to curb inflation, which traders fear could slow the country's growth.

China ordered its banks to hold more reserves, the second time it has done so in the past two weeks. The goal is to curb lending and avoid speculative bubbles. Inflation in China shot to a more than two-year high last month. Investors also expect China to raise key interest rates as part of its effort to control inflation.

The Dow Jones industrial average rose 22.32, or 0.2 percent, to 11,203.55 on Friday. The broader Standard & Poor's 500 index rose 3.04, or 0.3 percent, to 1,199.73.

In currencies, the euro climbed to $1.3738 from $1.3673 late Friday in New York. The dollar fell to 83.40 yen from 83.56 yen.

Benchmark oil for January delivery was up 69 cents to $82.67 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 44 cents to settle at $81.98 on Friday.

[Associated Press; By PAMELA SAMPSON]

Associated Press researcher Ji Chen contributed from Shanghai.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.