Euro bounces in Asia as Shanghai adds to strong gains

Pedestrians are reflected on an electronic stock board of a securities firm in Tokyo Tuesday, May 12, 2015. Asian stock markets were tepid Tuesday after the latest talks between Greece and its European creditors failed to reach agreement on bailout terms as the Greek government runs low on cash. AP PHOTO/EUGENE HOSHIKO

HONG KONG–The euro recovered Tuesday after being hit by concerns about Greece’s bailout reform talks, while Shanghai added to the previous day’s strong rally after China’s interest rate cut raised hopes for further economy-boosting measures.

However, regional investors still remain jittery about proceedings in Europe as Athens warned it is close to running out of money, while Wall Street also provided a negative lead.

Tokyo reversed early losses thanks to bargain buying and ended marginally up, adding 3.93 points to close at 19,624.84. Sydney rose 0.88 percent, or 49.50 points, to 5,674.70 hours before the government unveils its budget later in the day.

Shanghai jumped 1.56 percent, or 67.64 points, to 4,401.22 a day after rallying more than three percent but Hong Kong retreated 1.12 percent, or 311.02 points, to 27,407.18.

Seoul closed flat, edging down 0.61 points to 2,096.77.

US shares ticked down on Monday, ending a two-day advance, as nerves set in over Greece’s bailout reform talks.

Athens has managed to garner enough money to repay the International Monetary Fund 750 million euros ($840 million) and avoid a default, keeping it from tumbling out of the eurozone for now.

However, the bloc’s finance ministers, meeting in Brussels, said Greece could not hope for any of the final 7.2-billion-euro tranche of its 240-billion-euro EU-IMF bailout until it makes key reforms.

And with Greek Finance Minister Yanis Varoufakis admitting the country faced an imminent crisis, investors fear for its future in the eurozone.

On Wall Street the Dow fell 0.47 percent, the S&P 500 dropped 0.51 percent and the Nasdaq lost 0.20 percent.

Fresh China easing

The euro, which suffered a sell-off Monday in US trade, was higher after Athens said it would make its IMF payment. It bought $1.1236 and 134.74 yen in Tokyo Tuesday, compared with $1.1154 and 133.97 yen in New York.

The dollar was at 120 yen against 120.11 yen in US trade.

In Shanghai, buying was supported by Sunday’s 25 basis point rate cut, the third since November.

“It’s pretty clear that the Chinese officials are still very much in easing mode and the rally for now is still well supported, more by liquidity than economic fundamentals,” Ankur Patel, chief investment officer at R-Squared Macro Management LLC, told Bloomberg News. “We do expect more easing.”

Shanghai and Hong Kong’s stock markets have surged this year on expectations the government will unveil a slew of stimulus measures to kickstart growth in the Chinese economy, which expanded last year at its slowest pace in a quarter of a century.

On oil markets US benchmark West Texas Intermediate for June delivery added 19 cents to $59.44 while Brent crude for June gained 19 cents to $65.10 in afternoon trade.

Gold fetched $1,184.73 from $1,185.20 late Monday.

In other markets:

— Bangkok fell 1.04 percent, or 15.58 points, to 1,458.72.

— Mumbai fell 2.29 percent, or 629.82 points, to end at 26,877.48 points.

Tata Steel dropped 6.29 percent to 353.15 rupees, while Dr. Reddy Laboratories gained 3.31 percent to 3,473.50 rupees.

— Kuala Lumpur fell 0.38 percent, or 6.88 points, to close at 1,798.61.

SapuraKencana Petroleum led energy stocks lower, falling 1.8 percent to 2.73 ringgit per share, while Petronas Gas fell 1.77 percent to close at 22.20 ringgit. IOI Corp. rose 0.73 percent to 4.16 ringgit.

— Singapore closed down 0.82 percent, or 28.47 points, at 3,442.33.

Oil rig maker Keppel Corp. declined 0.57 percent to Sg$8.73 while public transport firm ComfortDelGro fell 0.97 percent to Sg$3.05.

— Jakarta ended up 0.64 percent, or 33.13 points, at 5,205.61.

Food manufacturer Indofood Sukses Makmur gained 4.14 percent to 6,925 rupiah, while pharmaceutical firm Kalbe Farma slipped 2.97 percent to 1,795 rupiah.

— Taipei rose 0.18 percent, or 17.01 points, to 9,680.73.

Taiwan Semiconductor Manufacturing Co. fell 0.67 percent to Tw$147.5 while smartphone maker HTC was 0.45 percent lower at Tw$110.5.

— Wellington was flat, edging down 1.72 points to 5,746.23.

Air New Zealand fell 0.36 percent to NZ$2.8 and Spark rose 1.41 percent to NZ$2.87.

— Manila closed 0.21 percent, or 16.65 points, higher at 7,794.55.

Universal Robina was up 2.9 percent at 205.80 pesos, Bank of the Philippine Islands eased 0.49 percent to 101 pesos while Bloomberry Resorts was up 3.76 percent at 12.14 pesos.