Asian shares edge up ahead of European summit

HONG KONG: Asian markets were mostly higher in nervous trade Friday as European leaders put back a final plan to contain the eurozone sovereign debt crisis.

A rift between France and Germany over how to boost the continent's rescue fund made it unlikely a summit on Sunday would end in a solid deal, leading the 17-nation bloc to announce a second meeting would be held Wednesday.

"We have made enormous progress but not enough to take final decisions," said Steffen Seibert, a spokesman for German Chancellor Angela Merkel.

"We will have talks on Sunday and we will take decisions on Wednesday."

The uncertainty left many dealers on the sidelines.

Hong Kong added 0.47 percent, Seoul added 1.15 percent and Sydney gained 0.41 percent, while Shanghai was up 0.33 percent and Tokyo was flat by the break.

Europe's two biggest economies have been unable to reach agreement on reinforcing the European Financial Stability Facility (EFSF) despite their leaders announcing last week that they had a plan in place, Investors have been hammered in recent weeks as Paris and Berlin bicker over how to beef up the fund to save weak economies such as Greece, Italy and Spain and avoid another global financial crisis.

France has been pushing for the fund to morph into a bank that could borrow from the European Central Bank to help troubled economies but Berlin opposes that on the grounds it would entail changing the EU's founding treaty.

"Doubts still remain on whether something solid will come out of the meeting," said Hideyuki Ishiguro, supervisor of investment strategy at Okasan Securities. "The wait-and-see mood will likely continue until Wednesday."

One of the top items on the agenda for the weekend's meeting will be deciding whether to approve a fresh multibillion-euro loan for cash-strapped Athens.

Hopes that loan would be agreed were boosted by news the Greek parliament had approved late Thursday a controversial batch of tough austerity measures demanded by its creditors.

On currency markets the euro firmed to $1.3786 in early Tokyo trade, from $1.3772 late Thursday in New York while it edged up to 105.85 yen from 105.81 yen.

The dollar was at 76.79 yen from 76.78 yen.

Wall Street provided a mixed lead, with the Dow up 0.32 percent, the S&P 500 up 0.46 percent and the Nasdaq down 0.21 percent.

Oil was higher, with New York's main contract, light sweet crude for delivery in December rising 30 cents to $86.37 per barrel on its first trading day.

Brent North Sea crude for December delivery gained six cents to $109.82.

By 0220 GMT, gold was trading at $1,627.45 an ounce, up from $1,624.83 late Thursday. (AFP)