Asian stocks pare gains

Asian stocks pared gains as Italy and France prepared to sell debt and Moody's Investors Service reiterated it plans to review the credit ratings of European nations even after an agreement to tighten fiscal controls in the region and boost a bailout fund.

Europe's leaders last week outlined a "fiscal compact" to prevent future debt run-ups and accelerated the start of a planned €500 billion rescue fund.

"Of course people are getting relief from the Europe talks, but people probably don't think they still have any long- term solution," said Alex Wong, an asset-management director at Ample Capital Ltd. in Hong Kong. "People are very cautious."

The MSCI Asia Pacific Index gained 0.7 per cent to 115.83 as of 5.46pm in Tokyo, paring a gain of as much as 1.4 per cent. Almost two shares rose for each that fell in the measure.

The gauge dropped 2.2 per cent last week after Standard and Poor's said it may cut credit ratings for Germany, France and 13 other euro-area countries amid a deepening debt crisis.

The Hang Seng Index fell 0.1 per cent, reversing an advance of as much as 1.8 per cent.

"The European situation will continue to bother us into next year as policy initiatives seem insufficient," said Mark Matthews, Singapore-based head of research for Asia at Bank Julius Baer and Co., which has about $180 billion globally. "US economic data is improving quite nicely and that's one of the few bright spots in the world."

Japan's Nikkei 225 Stock Average increased 1.4 per cent led by Olympus Corp, the endoscope maker at the center of an accounting scandal. Its shares jumped 7.8 per cent after saying it will meet a December 14th deadline to submit its accounts to avoid delisting.

South Korea's Kospi Index gained 1.3 per cent. Australia's SandP/ASX 200 index added 1.2 per cent. China's Shanghai Composite Index declined 1 per cent.

Shares of exporters gained as confidence improved among consumers in the US, the world's biggest economy. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment rose to a six-month high of 67.7 in December from 64.1 in November, beating estimates.

Bloomberg