Asian stocks close mostly up as G8 summit gets underway
Posted: 07 July 2008 1921 hrs

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HONG KONG - Asian stocks closed mostly higher on Monday, boosted by a sharp jump in China, as the G8 summit of world leaders began with the global oil and food price crises high on the agenda.

Chinese shares rose 4.59 per cent, buoyed by upbeat profit forecasts from banks and soothing words from officials about the importance of financial market stability following a steep plunge over many months.

Hong Kong rose over two per cent, Taiwan and Singapore jumped about 1.5 per cent and Japan was up nearly one per cent, but Australia slipped 1.6 per cent.

Investors are waiting to see if the three-day Group of Eight summit will take a tough line on the global economic threat from rising inflation, which has been stoked worldwide by soaring fuel and food prices.

There are fears inflation will hit business profits, consumer spending and economic growth, especially if central banks push up borrowing costs. Such concerns have contributed to sharp falls in Asian stocks this year.

But many investors put these worries to one side on Monday, gambling some shares may have fallen too far. The rise in Japan snapped a 12-session losing streak, a sequence that had been the bourse's worst such performance since 1954.

Elsewhere in Asia, South Korean shares closed little changed as embattled President Lee Myung-Bak sacked three Cabinet ministers to try to end mass protests against US beef imports, which have shaken his government.

The country's central bank and finance ministry also warned that they would take "strong measures" to stabilise the foreign exchange rate of the won, triggering uncomfortable memories of past Asian currency crises.

Among other markets, India and the Philippines rose, but Malaysia, Thailand, Indonesia and New Zealand fell. - AFP/ir