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Asian markets rise, brushing off China rate hike
Asian markets follow Wall Street higher, brushing off China interest rate hike
By The Associated Press

BANGKOK (AP) ' Asian markets managed small gains Thursday, shrugging off a weak U.S. growth report and an interest rate hike in China.

Oil prices rose to above $97 a barrel Thursday in Asia as a report showed U.S. crude supply fell more than expected last week, suggesting demand is improving. The dollar slipped against the euro and the yen.

Hong Kong's Hang Seng index rose 0.5 percent to 22,623.20, while South Korea's Kospi was 0.3 percent higher to 2,177.72. Benchmarks in Australia, Singapore and Indonesia were also higher, while those in the Philippines, Taiwan and New Zealand fell.

Japan's Nikkei 225 recoiled 0.1 percent to 10,072.37, a day after hitting a post-earthquake high. The country was battered by an earthquake and tsunami on March 11 that killed tens of thousands of people and sent the economy reeling.

Japanese exporters dipped on a strengthening yen, which makes products that are sent overseas more expensive. Honda Motor Corp. lost 1.1 percent while Toshiba Corp. lost 1.2 percent.

South Korea's Samsung Electronics lost 1.1 percent after the company said its profitability slumped in the second quarter as strong performance in fast-growing smartphones could not overcome weakness in liquid crystal displays.

Investors chose to brave the headwinds in search of attractive prices, with another interest rate hike Wednesday by China's central bank seen by some as a positive step toward fighting inflation.

"Rate hike is good for China ... We are glad that the authority does not hesitate to take action," wrote analysts at DBS Bank Ltd. in Singapore.

Markets held up despite the rate hike and a report showing slowing growth at U.S. service providers in June.

In New York on Wednesday, the Standard & Poor's 500 index rose 1.3 percent to close at 1,339.22. The Dow Jones industrial average rose 0.4 percent to close at 12,626.02. The Nasdaq added 0.3 percent to 2,834.02.

Later Thursday, the European Central Bank is expected to raise its main interest rate by a quarter percentage point to 1.5 percent, its second hike since April as it tries to rein in above-target inflation levels.

Benchmark oil for August delivery was up 73 cents to $97.38 a barrel in electronic trading on the New York Mercantile Exchange. Crude lost 24 cents to settle at $96.65 on Wednesday.

In currencies, the euro rose to $1.4333 from $1.4296 in late trading Wednesday in New York. The dollar weakened to 80.83 from 80.97 yen.

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