Asian stock markets were mixed today as markets nervously awaited a key speech by German chancellor Angela Merkel in hopes she might unveil new steps to stanch Europe’s escalating debt crisis.
Japan’s Nikkei 225 index rose 0.2% to 8,613.28, and Australia’s S&P/ASX 200 gained 0.3% to 4,242.
But South Korea’s Kospi dropped 0.3% to 1,910.87 and Hong Kong’s Hang Seng fell 0.4% to 18,925.68. Benchmarks in Taiwan, Singapore and mainland China were also lower.
Mrs Merkel will speak today before Germany’s parliament about Europe’s financial crisis and ahead of a summit of European Union leaders on December 9, whose goal is to deliver a long-term solution to the debt crisis.
Mrs Merkel has acknowledged the need for changes to the European Union treaty to impose stricter financial controls on countries that use the euro common currency to prevent them from taking on too much debt.
On Wednesday, the US Federal Reserve, European Central Bank, Bank of England and the central banks of Canada, Japan and Switzerland said they were working together to make it easier for banks to borrow dollars.
The coordinated effort was meant to prevent Europe’s debt crisis from exploding into a global panic.
Should a European bank fail or if a country default on its debt, investors fear it could result in a freeze-up in global lending like the one that occurred in 2008 when Lehman Brothers collapsed.
The central bank action caused global stocks to rally yesterday.