Asian stocks rise as Shanghai jumps; Europe flat

By The Associated Press

HONG KONG - Most Asian markets climbed Thursday as Chinese stocks jumped nearly five per cent and helped offset worries that rising U.S. job losses will derail the global economic recovery. European shares opened little changed.

Chinese markets continued their turnaround after a sharp sell-off Monday following reports that lending by big state-owned banks remained robust in August. Oil prices and Wall Street futures advanced moderately.

However, gains were limited in many other regional markets by a report showing the world's largest economy hemorrhaged more jobs than expected last month.

The news gave investors more reason to fear rising unemployment will hurt consumer spending, which makes up about two-thirds of U.S. economic activity, and sap economic growth. The report also dimmped hopes for a key government reading on jobs due out Friday.

"Sentiment is quite cautious right now," said Alex Tang, head of research at Core Pacific-Yamaichi International in Hong Kong. "The latest indicators keep suggesting we're going to see a weak recovery in the U.S., particularly in terms of consumer spending."

"All and all, the markets are definitely ahead of fundamentals when we look at all these uncertainties and concerns," he said.

In Europe, the Britain's FTSE 100 edged down 0.1 per cent, Germany's DAX was flat and France's CAC-40 added 0.1 per cent. U.S. futures pointed to a stronger open on Wall Street.

In Japan, the benchmark Nikkei 225 stock average lost 65.82 points, or 0.6 per cent, to 10,214.64. Korea's Kospi closed relatively flat, and Australia's main benchmark fell 0.2 per cent.

In China, the Shanghai Composite Index surged 130.05 points, or 4.8 per cent to close at 2,845.02. That helped Hong Kong's market, where many Chinese companies are listed, and the benchmark Hang Seng added 1.2 per cent to 19,761.68

Investors in greater China were cheered by a report in a state-run newspaper that new lending by China's four biggest state-run banks totaled 160 billion yuan (US$23.4 billion) in August, higher than market expectations.

Further boosting sentiment were reports that stock regulators intend to ensure the stable development of markets.

Markets in Taiwan, Thailand and Singapore also rose.

Overnight in the U.S., the still-deteriorating job market unnerved traders, and Wall Street closed lower for its fourth straight session Wednesday.

The Dow Jones industrial average fell 29.93, or 0.3 per cent, to 9,280.67, pushing its four-day slide to 300 points, or 3.1 per cent. The index crossed between gains and losses 108 times as it traded in the second-tightest point range this year.

The S&P 500 index fell 3.29, or 0.3 per cent, to 994.75, while the Nasdaq composite index fell 1.82, or 0.1 per cent, to 1,967.07.

Oil prices were marginally higher in Asia after ending flat overnight. Benchmark crude for October delivery gained 84 cents to $68.89 a barrel.

The dollar was little changed throughout trade in Asia before rising to 92.34 yen from 92.25 yen. The euro rose to $1.4305 from $1.4266.