Asian Markets Recover Modestly After Dip

FRANKFURT, Germany -- Asian markets bounced back after last week's global selloff but European stocks struggled Monday as persistent worries about the effect of U.S. housing woes on international markets held investors back.

The U.K.'s FTSE 100 index fell 0.4 percent to 6,192.50, while the German DAX 30 Index dropped 0.5 percent to 7,416.63 and the French CAC-40 index lost 0.3 percent to 5,627.12 as worries about credit markets overshadowing corporate earnings and merger news.

Shares of German gas producer Linde AG surged almost 5 percent as it reported a nearly 6 percent increase in second-quarter profit, while shares of retail bank Deutsche Postbank AG plunged more than 4 percent on concerns about exposure to U.S. subprime fears.

European and Asian markets sank Friday in reaction to a sharp decline on Wall Street Thursday amid worries that problems in the U.S. subprime mortgage market could drag on U.S. economic growth and cause investors to pull out of riskier assets.

But some of those concerns subsided Monday in Asia as investors bought stocks that appeared oversold, betting that worries over the broader impact of U.S. mortgage market ills may have been overdone, analysts said.

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Japan's benchmark Nikkei 225 index inched up 0.03 percent to 17,289.30, after having plunged 2.4 percent Friday. Hong Kong's benchmark Hang Seng index rose 0.8 percent, Singapore's market climbed 1 percent and Australian stocks gained 0.4 percent.

Chinese stocks hit a new record, but Philippine shares slid 1.5 percent.

Analysts said much depends on what happens next in the New York market. U.S. stock futures rose in hesitant trading Monday as Wall Street remained jittery about a possible credit crunch hurting growth.

U.S. markets are "looking for signs of recovery after last week's sensational slides," said Rebecca Engmann Darst of Interactive Brokers, adding that the U.S. market will see the release of earnings from several big companies, but a very light day for economic data.

David Cohen, director of Asian forecasting at Action Economics in Singapore, said: "Traders will certainly still be watching what happens on Wall Street this week, but the sense is that as long as it doesn't trigger a more serious economic slowdown in the U.S., the world economy should be able keep growing and help the Asian economies."

The Asian gains came after Wall Street slumped again Friday despite figures that showed a surprise rebound in U.S. economic growth during the second quarter. The Dow Jones industrial average slid 1.5 percent Friday, bringing the index's decline for the week to 4.2 percent _ the largest percentage drop since late March 2003.

In Sydney, frantic selling Friday gave way to bargain-hunting Monday, with mining companies such as BHP Billiton and Rio Tinto leading the market's advance. The benchmark S&P/ASX 200 rose 25.9 points or 0.4 percent to 6,108.8.

In Tokyo, the market hovered in negative territory for much of the session until traders began to buy up shares of companies that had fallen sharply, including those with positive earnings results.

"There does remain the risk that New York will fall further," said Koji Takeuchi, a senior economist at Tokyo's Mizuho Research Institute. "However, I think Tokyo traders saw that the drop here had created bargains, leading them to decide it was worth it to do some buying."

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