Asian Markets Rose Then Retracted

On Monday, Asian stock markets rose. Hopes that slow U.S. growth would be boosted by the recent measures taken by the Federal Reserve pushed Asian stocks up. In Hong Kong, Hang Seng rose a total of 1.1 percent to finish at 20,978.72. Across the ocean in Singapore and Indonesia, stocks fell.

Part of the change was also driven by market closures in China and Japan as a result of the national holidays. In Taiwan, the market shifted between gains and losses. South Korea increased 0.3 percent. Led by improving business conditions among manufactures, to South Korea finished at 1,982.15.

Australia also boasted growth in their S&P/ASX 200. This grew 0.8 percent to finish out at 4,396. Australia’s mining sector was bolstered by a rise in overall commodity prices. The rising price of industrial metals boosted BHP Billiton Ltd. 1.8 percent. Their rival, Rio Tinto Ltd. Also increased 1 percent while Fortescue Metals group reported a 0.7 percent increase in stock prices.

Investors at the moment are faced with United States economic growth that is weaker than expected. In Europe, the Euro is falling as a result of the recent downgrade of Spain’s debt. Overall, investors are hoping that the Federal Reserve Bank will soon by more bonds to keep interest rates at their current low levels.

Known as quantitative easing, the Federal Reserve Bank buys up bonds to ensure long-term interest rates stay low. They have already carried out an exceptional two rounds of quantitative easing recently. In the market, the low price of bonds encourages investors to invest in the more profitable stock market. Traders are currently waiting for United States job figures for April. These numbers are to be released Friday and any lower than expected number could impact the market.

In Europe, investors are eagerly awaiting the selection of France’s next president. If Francois Hollande wins, the market could take a turn for the worse. Hollande advocates new EU treaties that get rid of current austerity measures. As Germany pulls along the European Union economically, any shift of power could disturb the delicate balance. An increase in French spending under Hollande could further weaken the European Union, and coupled with debt problems in neighbouring Spain, could destroy its economy.

In more positive news, the index that measures South Korean manufacturing confidence has increased to 90 in May. The central bank of South Korea reports an improving economy and improvements in the manufacturing sector.

Sources from Pamela Samson AP