Asian stock markets rise on stimulus hopes

Associated Press
FILE- In a July 13, 2012, file photo, traders work as the New York Stock Exchange nears closing. JPMorgan Chase blew away a cloud of concern hanging over the banking industry Friday and set off a rally in stocks.  (AP Photo/Bebeto Matthews)
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FILE- In a July 13, 2012, file photo, traders work as the New York Stock Exchange nears closing. JPMorgan Chase blew away a cloud of concern hanging over the banking industry Friday and set off a rally in stocks. (AP Photo/Bebeto Matthews)

BEIJING (AP) — Asian stocks rose Tuesday as optimism China might take new steps to stimulate its slowing economy offset weak U.S. data and the IMF's gloomier outlook for world growth.

Japan's Nikkei 225 rose 0.8 percent to 8,793.63 and China's Shanghai Composite Index gained 0.6 percent to 2,162.01. South Korea's Kospi added 0.9 percent to 1,833.92.

Expectations of possible Chinese stimulus measures rose after Premier Wen Jiabao's weekend promise of tax breaks and other aid to struggling small businesses. China's second-quarter growth fell to a three-year low of 7.6 percent but analysts said a rebound might be in sight.

"There is strong evidence suggesting that growth remains solid and its momentum is rebounding. Beijing is bound to do more to ensure that this continues," said Credit Agricole CIB economist Dariusz Kowalczyk in a report.

There are also hopes U.S. Federal Reserve chief Ben Bernanke will hint at the possibility of additional stimulus for the American economy when he addresses Congress on Tuesday and Wednesday.

Among other Asian markets, Singapore's Straits Times Index gained 0.7 percent to 3,020.18 and Sydney's S&P ASX 200 jumped 1 percent to 4,145.70.

Asian gains came despite overnight declines on Wall Street after weaker-than-expected June retail sales and the International Monetary Fund's decision to reduce its global growth forecast.

The U.S. Commerce Department said June retail sales suffered a third straight monthly decline, falling 0.5 percent. Forecasters had expected a 0.2 percent gain.

The Dow Jones Industrial Average and the Nasdaq both lost 0.4 percent. The Standard & Poor's 500 shed 0.2 percent.

The IMF reduced its outlook for global growth to 3.5 percent from its April forecast of 3.6 percent. It cut growth forecasts for China, India and Brazil.

Worries about the U.S. economy have dominated markets, alongside Europe's debt crisis and China's cooling growth.

Investors are watching for details of Spain's bank bailout. This week, the 17 countries that use the euro are expected to give Spain 30 billion euros as part of a larger bailout for its banks.

Benchmark crude for August delivery was up 17 cents at $88.60 in electronic trading on the New York Mercantile Exchange. The contract rose $1.33 to end at $88.43 in New York on Monday.

In currency markets, the dollar rose 0.1 percent to 78.92 yen and the euro gained 0.2 percent to $1.229.

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