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Asian stocks, euro rise on European rescue plan

October 26, 2011 |  9:15 pm

Asian stock markets and the euro currency rallied on Thursday on word of Europe’s new plan to contain its two-year-old government debt crisis.

Share prices were up across the Asia-Pacific region at midday, with Japan’s Nikkei-225 index up 1.4%, the South Korean market up 1.2% and Australian shares up 2.3%.

The euro currency rose 0.5% to $1.398 from $1.391 on Wednesday. The euro has rebounded from its recent low of $1.318 on Oct. 3.

Yields rose on U.S. Treasury bonds trading in Asia, a sign that some investors were moving out of the classic haven of American government debt. The 10-year T-note yield edged up to 2.23% from 2.21% on Wednesday.

The plan to boost the firepower of Europe's rescue fund for struggling member states to an estimated $1.4 trillion "might just finally convince the skeptical markets that this time the backstop against contagion is for real," said Christopher Rupkey, economist at Bank of Tokyo-Mitsubishi.

European authorities will be bracing to see how the continent’s bond and stock markets react when trading opens at midnight PDT.


Will the rescue plan work? Watch European bond yields

Italy pledges reforms as part of debt-crisis plan

German Chancellor rallies support for rescue plan

-- Tom Petruno