Stocks uncertain amid Spanish fears

Asian stock markets vacillated between gains and losses today as signs of a recovering US economy were offset by fears that Spain might need an expensive financial bailout.

Japan’s Nikkei 225 index rose 0.2% to 9,487.59 as the yen stabilised against the dollar.

But South Korea’s Kospi index slipped 0.1% to 1,990.29 and Hong Kong’s Hang Seng fell 0.3% to 20,558.38.

Australia’s S&P/ASX 200 gained marginally to 4,305.90. Benchmarks in mainland China, Singapore and Taiwan fell while Indonesia and the Philippines rose.

A strong retail sales report in the US was not enough to counteract fears that the debt crisis enveloping Europe’s smaller economies might morph into something even bigger.

“Eurozone stress, particularly in Spain continues to act as a weight on market sentiment, with equity markets ignoring a relatively strong US retail sales report,” said analysts at Credit Agricole CIB in Hong Kong.

Spain has the fourth-largest economy among the 17 nations that use the euro and is widely considered too expensive to rescue.

The yield on Spain’s benchmark 10-year government bond jumped above 6% for the first time since November. Rising yields are a sign that investors are less confident in the country’s finances.

Greece, Ireland and Portugal had to seek bailouts after their borrowing costs rose above 7%, and traders are becoming concerned that Spain might be next.