AP News

Asian stocks inch higher on Europe optimism

SINGAPORE (AP) — Asian stock markets inched higher Monday amid continued optimism over Europe's moves to ease its debt crisis and economic malaise.

Japan's Nikkei 225 index rose 0.2 percent to 9,020.93 and South Korea's Kospi gained 0.2 percent to 1,857.26. Australia's S&P/ASX 200 index added 1.1 percent to 4,140. China's Shanghai Composite index shed 0.3 percent to 2,218.14.

Markets in Hong Kong were closed Monday to commemorate the hand-over of the territory to China in 1997.

Leaders of the 27 European Union countries said after a meeting Friday that they would seek to centralize regulation of European banks and, if necessary, bail them out directly, instead of funneling loans through governments that already have too much debt.

The EU said it also plans to ease borrowing costs for Italy and Spain, the euro region's third- and fourth-largest economies, stop mandating painful budget cuts to every country in need of emergency financial aid and tie their budgets, currency and governments more tightly.

Investors will be closely watching as EU finance ministers hash out the details of these plans over the next two weeks.

Some analysts expect the European Central Bank and the Bank of England to cut lending rates this week in a bid to spur economic growth.

"We look this week for renewed easing by the ECB and BoE in an environment of very soft business confidence," Barclays said in a report. "The primary factor behind weak global confidence is weakness in EU demand."

Trading volume in the U.S. will likely be light this week amid the Independence Day holiday on Wednesday.

Global stock and commodity markets soared Friday amid EU optimism. The Dow Jones industrial average closed up 2.2 percent at 12,880.09. The Standard & Poor's 500 index rose 2.5 percent to 1,362.16. The Nasdaq composite average jumped 3 percent to 2,935.05.

Benchmark oil for August delivery was down $1.26 to $83.70 a barrel in electronic trading on the New York Mercantile Exchange. The contract soared $7.27 to close at $84.96 in New York on Friday.

In currencies, the euro fell to $1.2632 from $1.2646 Friday in New York. The dollar rose to 79.85 yen from 79.82 yen.

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