HONG KONG (AP) - Asian stocks edged higher Monday as the Chinese premier’s positive assessment of the world’s third-largest economy helped soothe nerves ahead of key earnings reports from leading U.S. companies. European markets opened lower.
Many Asian markets seesawed before heading modestly higher, led by Hong Kong and Shanghai stocks after Chinese Premier Wen Jiabao said Saturday the economy was faring “better than expected” as a massive stimulus package produces results.
Coupled with more pledges to pull the economy out its slump, the comments from Wen, also the nation’s top economic official, gave investors more reason to hope China will heal faster and help both Asian and overseas markets along the way.
Investors were also awaiting results that could test a growing belief that the world economy and banking system have turned a corner. Among the hundreds of U.S. companies due to report are Bank of America, Coca-Cola, Microsoft, IBM and McDonald’s.
So far, rosier-than-expected earnings from financial giants like Citigroup and Goldman Sachs have buoyed optimism of a recovery and given further impetus to a six-week rally.
Still, with a number of markets already up more than 20 percent in less than two months, many are becoming wary of another bubble in the making and say any negative surprises could cause a bout of selling.
“Equities markets are beginning to be quite detached from the underlying economic fundamentals _ once again,” said Kirby Daley, senior strategist at Newedge Group in Hong Kong. “The worst is far from over.”
As trading got under way in Europe, Britain’s FTSE 100 lost 0.6 percent, Germany’s DAX retreated 2 percent and France’s CAC-40 was off 1.7 percent. The euro fell against the dollar to its lowest point since mid-March as traders anticipated another interest rate cut from the European Central Bank.
U.S. futures pointed to lower open on Wall Street Monday. Dow futures fell 79 points, or 1 percent, to 8,005 and S&P 500 futures slipped 10.3, or 1.2 percent, to 856.50.
Earlier in Asia, Japan’s Nikkei 225 stock average recouped morning losses to rise 17.17 points, or 0.2 percent, to 8,924.75 while South Korea also made up lost ground, rising 0.6 percent to 1,336.39. Taiwan’s market was higher, though markets in Australia and Singapore retreated.
In China, Shanghai’s key index added 2.1 percent to 2,557.46 while Hong Kong’s Hang Seng climbed 1 percent to 15,750.91. Wen said the economy appeared to be bouncing back, with industrial output, consumer spending and factory investment on the rise.
“China’s package plan is already paying off and positive changes have taken place in the economy,” Wen said Saturday at a forum in China. “The situation is better than expected.”
Mainland investors were also encouraged after a Chinese regulator said bank lending this year would not be limited to the 5 trillion yuan ($731 billion) the government has cited as a goal. A flood of liquidity in the market has been pushing up stocks since the start of the year.
Chinese airlines were among the day’s best performers after tickets prices were raised Monday following reports of heavy 2008 losses for state-owned carriers. Air China soared 8.6 percent in mainland trade, while China Eastern jumped 16.9 percent in Hong Kong.
In Japan, steelmakers strengthened after analysts issued upbeat appraisals of the sector and said producers may see lower price cuts from automakers. Nippon Steel, the country’s leading producer, advanced 4.3 percent.
Gains in Japan’s broader market were capped by losses by several companies, including Toshiba. The giant chipmaker _ which projected a wider-than-expected fiscal-year loss, warned of contract job cuts and may need to raise fresh capital _ dropped 4.8 percent.
On Friday in New York, stocks closed marginally higher as earnings from Citigroup and General Electric surpassed the market’s expectations.
The Dow Jones industrial average rose 5.90, or 0.1 percent, to 8,131.33. The Standard & Poor’s 500 index added 4.30, or 0.5 percent, to 869.60,
In oil, benchmark crude for May delivery fell $1.76 to $48.57 a barrel in Asian trade. The contract Friday rose 35 cents to settle at $50.33.
In currencies, the dollar eased to 98.85 yen from 99.13 yen, while the euro weakened to $1.2964 from $1.3040.
AP researcher Bonnie Cao in Beijing and AP Writer Tomoko A. Hosaka in Tokyo contributed to this report.