10/10/2011 12:34 EDT | Updated 12/09/2011 05:12 EST

Asia stocks mixed after French, German leaders promises debt action but give few details

BANGKOK - World stock markets perked up Monday after a weekend meeting of the leaders of France and Germany provided a promise of action on Europe's debt crisis.

Oil prices rose above $84 a barrel while the dollar slipped against the euro and the yen.

German Chancellor Angela Merkel and French President Nicolas Sarkozy on Sunday said a comprehensive response to the debt crisis would be finalized by the end of the month, including a detailed plan to ensure European banks have adequate capital. Stock markets welcomed the announcement, even though it offered little in the way of specifics.

In early European trading, Britain's FTSE 100 rose 0.6 per cent to 5,334.59. Germany's DAX gained 0.5 per cent to 5,704.35 and France's CAC-40 climbed 0.5 per cent to 3,110.99. Wall Street was poised for a higher opening, with Dow Jones industrial futures up 0.9 per cent at 11,166 and S&P 500 futures rising 1 per cent to 1,166.

Shares in Asia were higher after a tentative start. Hong Kong's Hang Seng pared early losses to edge up marginally at 17,711.06. South Korea's Kospi rose 0.4 per cent to 1,766.44 and Australia's S&P/ASX 200 gained 0.9 per cent to 4,201.

The Shanghai Composite Index was down 0.6 per cent at 2,344.79 and the Shenzhen Composite Index for China's smaller second stock market was 0.6 per cent lower at 997.84.

Stocks in the Philippines, Singapore, Indonesia and India rose. Markets in Japan and Taiwan were closed for national holidays.

Investors were treading carefully as Greece struggled with its finances to qualify for the next installment of an international bailout loan needed to avoid bankruptcy. A Greek government default would cause the value of Greek bonds held by European and U.S. banks to plunge in value with possible global repercussions.

"After so many months, it still is not clear how leaders are going to resolve" the European debt crisis, said Lee Kok Joo, head of research at Phillip Securities in Singapore. "I think a lot of investors are just waiting to see what the next step is that some of these leaders will take."

Analysts have urged European officials to identify all the banks in the region that need to replenish their capital reserves, then decide whether to compel them to raise that money from markets and to provide government financing to the ones that can't.

Many experts say the capital cushions of many European banks must be strengthened in order to withstand a Greek default.

"Discussions over the weekend between German Chancellor Merkel and French President Sarkozy delivered little in substance," Credit Agricole CIB said in a research note.

"In the meantime, markets may give eurozone officials the benefit of the doubt, but patience will run thin if no progress is made on these fronts," it said.

Chinese real estate shares fell after a weekend report by a research firm that housing prices in 100 cities declined in September for the first time this year following repeated interest rate hikes and other government efforts to cool an overheated economy.

Hong Kong-listed China Overseas Land & Investment Ltd. lost 3.5 per cent. China Resources Land Ltd. fell 3.4 per cent. China Vanke Co. dropped 3.1 per cent.

Meanwhile, energy shares rose on the back of stabilizing oil and gold prices. Australia's Woodside Petroleum gained 1.3 per cent and Energy Resources of Australia jumped 6.5 per cent.

A choppy day Friday on Wall Street left the Dow Jones industrial average down 20 points after a mixed U.S. jobs report and credit-rating cuts for Italy and Spain renewed concerns about Europe's debt crisis.

U.S. employers added 103,000 jobs last month, about double what economists had expected. The government also said more jobs were added in July and August than previously reported. But the payroll gains weren't enough to bring down the unemployment rate, which remained at 9.1 per cent.

The euro rose to $1.3535 from $1.3388 in late trading Friday in New York. The dollar weakened to 76.64 yen from 76.82 yen.

In energy trading, benchmark crude for November delivery was up $1.04 to $84.02 per barrel in electronic trading on the New York Mercantile Exchange. The contract climbed 39 cents to end Friday at $82.98 a barrel in New York.

Brent crude was up 62 cents at $106.49 a barrel on the ICE Futures Exchange in London.