Asian stocks closed positive, euro falls

JAKARTA: Asian stocks were closed in green areas as investors hunted for blue chip stocks.Nikkei recorded its highest level in seven months on buying into exporting companies' stocks, PT Monex Investindo Futures said in a market update. Meanwhile, Hang
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News Editor - Bisnis.com 21 Desember 2010  |  09:58 WIB

JAKARTA: Asian stocks were closed in green areas as investors hunted for blue chip stocks.Nikkei recorded its highest level in seven months on buying into exporting companies' stocks, PT Monex Investindo Futures said in a market update. Meanwhile, Hang Seng was closed up this afternoon following bargain hunting and rising property stocks. Steel producers and oil refineries supported Korea's Kospi which rebounded as the geopolitical tension in Korean Peninsula subsided. At forex market, euro fell as Moody's Investors Service put Portugal's rating under review for possible downgrade. EUR/USD was traded at US$1.3135 from UD$1.3190 before the announcement was made by the rating agency. Wahyu Tribowo Laksono, an analyst at PT Askap Futures, told Bisnis that his target for euro in medium term remains at 1.27. As it enters quiet week ahead of Christmas Day, the target can be reached by early next year.Portugal's downgradeCredit rating agency, Moodys Investors Service, set Portugals A1 long term and Prime-1 short-term government bond rating on a possible downgrade.As written on their official website, the Moodys Corporation subsidiary business claimed three main triggers that drove the review. The first key is its concern over the country economic growth that has been under a great pressure in the couple of months in which mainly driven by weak domestic demand. The second one is their alarm on Portugal's ability to access the capital markets at a sustainable price since the government might have to fulfill its funding needs for the next several years.Finally, it sees potential obstacles that might hit banking sector that could have a financial impact on the government's balance sheet. Due to banks reliance on the European Central Bank for funding, Moodys perceives the necessity for the government to provide further support to help banks regain market confidence and access to re-enter the private capital market.In Moody's opinion, Portugal's solvency is not in question,but the likely deterioration in debt affordability over the medium term and ongoing concerns about the economy's ability to withstand fiscal consolidation and private sector deleveraging mean its outlook may no longer be consistent with an A1 rating," cited Anthony Thomas, Moody's Vice President and lead analyst for Portugal on the official statement.Moody's review of Portugal's ratings will focus on the economy's growth prospects. The international financial research and analysis will also keep an eye on governments ongoing funding program to find out whether the government remains able to access the capital markets and at what price.Although Moody's believes the authorities are determined to reduce the budget deficit to under 3% of GDP over the medium-term, lower funding costs will be key to limiting the recent deterioration in debt affordability and improving long-term debt sustainability.As a final point, the independent rating analyst, in conjunction with Moodys Financial Institutions Group, will also review whether the government may need to provide new funds to recapitalize the main banks in the country, amid to their recent analysis which placed most Portuguese banks on review of possible downgrade. (T05/NOM)

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