Asian markets broadly up after Spain budget

HONG KONG: Asian markets mostly rose on Friday as eurozone debt concerns were eased after Spain unveiled swingeing cuts in a budget that is expected to pave the way for a bailout.

Hong Kong added 0.25 percent, Sydney was flat, Shanghai added 0.10 percent and Seoul rose 0.20 percent. Tokyo was down 0.34 percent by the break.

Spain's government on Thursday announced its 2013 austerity budget, with 39 billion euros ($50 billion) in savings, including a third straight year of salary freezes for civil servants.

Despite days of violent street protests against measures aimed at getting the economy back on track, Mariano Rajoy's government outlined plans to cut the country's deficit from 8.9 percent last year to 2.8 percent in 2014.

The move, to be followed by the release of an audit of Spain's banking system on Friday, was seen by markets as one of the final acts before a sovereign bailout.

Spain has already accepted a rescue loan for its banks of up to 100 billion euros.

Investors welcomed the budget, with the borrowing rate on the country's benchmark 10-year bonds easing to 5.945 percent from 6.064 percent on Wednesday.

In Japan weak factory output data stoked fears over the country's economy, compounding a damaging diplomatic spat with its largest trading partner, China.

Output fell 1.3 percent month-on-month in August, a much sharper decline than an average market forecast of a 0.4 percent drop, the industry ministry said on Friday.

And Shanghai extended Thursday's strong gains on lingering expectations that the government will take the upcoming week-long public holiday as an opportunity to introduce a new round of stimulus for the slowing economy.

Wall Street closed in positive territory despite an unexpected downward revision to US second-quarter economic growth, to just 1.3 percent, far below the prior estimate of 1.7 percent, while durable goods orders plunged month-over-month in August.

At the end of trade the Dow advanced 0.54 percent, the S&P 500 added 0.96 percent and the Nasdaq climbed 1.39 percent.

In currency trade the dollar was changing hands at 77.53 yen, compared with 77.60 yen in New York late Thursday.

The euro fetched $1.2935 and 100.28 yen, compared with $1.2911 and 100.19 yen.

On oil markets New York's main contract, light sweet crude for November, was up 43 cents to $92.28 a barrel in morning Asian trade and Brent North Sea crude for delivery in November added 14 cents to $112.15.

Gold was at $1,779.30 at 0300 GMT compared with $1,753.40 on Thursday.