Asian shares rise after Berlusconi's resignation pledge
- 9 November 2011
- From the section Business
Asian markets posted modest gains after Italian Prime Minister Silvio Berlusconi said he would step down, boosting optimism that problems in the eurozone may ease.
Japan's main index rose 1%, South Korea was up 1% and Australia gained 1.5%.
US markets had gained earlier on the news.
Investors have been worried that Italy's high debt levels and low growth rate could see it struggle to repay its government bonds.
However, analysts said the limited reaction in the equity markets showed that concerns over Italy and the health of eurozone economies persist.
"The gravitational force is pulling the European area down into a recession, this is why Asian markets are so sceptical," said Arjuna Mahendran from HSBC Private Bank.
Further evidence of the lukewarm reaction came from the euro, which was little changed in Asian trade against the US dollar.
The European Union has asked Italy to implement economic reforms and Mr Berlusconi said he would step down after those reforms had been approved by parliament.
A vote on those measures is planned for next week.
But Mr Mahendran said investors in Asia are worried that time is running out.
"There's not much time left for these reforms to be implemented," he said.
"There's a significant danger that European banks, which account for about a quarter of total international capital flows into Asia particularly for bank lending, will start pulling some of that money back."
In the US, the Dow Jones rose 0.8% and the Nasdaq closed up 1.2%.