Asian markets mostly up, nerves set in over Greece
HONG KONG–Asian markets mostly rose Tuesday after European leaders agreed on a treaty aimed at ending huge deficits, but traders remained cautious as Greece continued talks to slash its debt mountain.
Upbeat Japanese data also gave support but the euro remained weak as the Greek issue rumbled on and traders looked for safe havens, while the strong yen raised the possibility the government would step into forex markets again.
Tokyo rose 0.11 percent, or 9.46 points, to 8,802.51, Seoul climbed 0.79 percent, or 15.24 points, to 1,955.79, Shanghai gained 0.33 percent, or 7.57 points, to 2,292.61 and Hong Kong was 1.14 percent, or 230.08 points, up at 20,390.49.
But Sydney ended 0.23 percent, or 10.0 points, lower at 4,262.7.
On Monday in Brussels, 25 of the 27 European Union nations adopted a new pact — to be formally signed in March — that will require governments to usher in laws on balanced budgets and impose near automatic sanctions on those who violate deficit rules. Britain and the Czech Republic refused to sign.
The leaders also set up a permanent rescue fund to begin operations a year early in July, although they will discuss before that whether to boost its size from an initial 500-billion-euro ($660-billion) target.
However, while the plan is aimed at avoiding future deficits, Athens remains locked in talks with its creditors to convince them to accept a 50 percent hit on their investment.
The deal – which has been held up by a row over the amount of interest Greece must pay on the remainder of the debt – is key to the country getting access to a second bailout from the European Union and European Central Bank.
While Prime Minister Lucas Papademos has expressed confidence an agreement will be met, traders remained on edge.
Ric Spooner, chief market analyst at CMC Markets in Sydney, said in a note: “Markets now appear to have reached a level where they need formal confirmation that an agreement on debt restructure has been struck with private investors and that a second rescue funding package will be provided to the Greek government.
“After the rally of recent weeks, equity markets may remain nervous at current levels until these issues have been formally resolved,” he said, according to Dow Jones Newswires.
A call by Germany for the Greek government to be placed under wardenship received scant backing from other European leaders, and Greece’s education minister called the idea “the product of a sick imagination.”
In Tokyo, data showed Japan’s annual industrial output fell 3.5 percent in 2011 — hit by the March 11 quake-tsunami and floods in Thailand — but rose by a more-than-expected 4.0 percent on month in December.
It also showed household spending saw its first increase since the March disasters.
The euro bought $1.3185 and 100.68 yen in European trade, compared with $1.3134 and 100.34 yen in New York late Monday. The dollar was flat at 76.34.
The dollar’s ongoing weakness prompted Japan’s finance minister to again suggest possible intervention after stepping in several times last year as the nation’s exporters felt the pinch from a strong yen.
“If there is excessive volatility or really speculative movement, I will be vigilant against it, and I will take decisive steps if necessary,” Jun Azumi told a regular briefing.
Azumi voiced hopes that Europe’s debt crisis would ease, helping to stabilize Japanese markets.
Europe’s main markets rose in early trade Tuesday with London’s FTSE 100 index rising 0.63 percent, Frankfurt’s DAX 30 gaining 0.69 percent while in Paris the CAC 40 added 0.81 percent to 3,292.01.
New York’s main oil contract, West Texas Intermediate crude for delivery in March, gained five cents to $99.77 a barrel.
Brent North Sea crude for March delivery was up 23 cents to $111.73.
Gold was at $1,737.50 an ounce at 1030 GMT, against $1,735.90 late Monday.
In other markets:
— Singapore closed up 0.64 percent, or 18.40 points, at 2,906.69.
Commodities trader Olam International was up 2.77 percent at Sg$2.60 and Oversea-Chinese Banking Corp gained 0.59 percent to Sg$8.60.
— Indian shares rose 1.96 percent, or 330.25 points, to 17,193.55.
Aluminium producer Hindalco climbed 7.89 percent to 148.35 rupees while Tata Global Beverages jumped 10.01 percent to 107.75 rupees after it announced Monday a joint venture deal to operate the country’s first Starbucks outlets.
— Manila closed 0.82 percent higher, adding 37.95 points to 4,682.44.
Ayala Corp. gained 0.34 percent to 351.20 pesos and DMCI Holdings rose 4.19 percent to 46 pesos while Energy Development Corp. fell 1.06 percent to 5.60 pesos.
— Taipei ended 1.48 percent, or 109.67 points, higher at 7,517.08.
Chunghwa Telecom rose 1.37 percent to Tw$96.2 while HTC fell 1.52 percent to Tw$485.5.
— Wellington fell 0.33 percent, or 11.02 points, to 3,296.20.
Fletcher Building slipped 1.66 percent to NZ$6.52 and Telecom Corp. was down 0.95 percent at NZ$2.095, while Air New Zealand was unchanged on NZ$0.91.
— Jakarta climbed 0.68 percent, or 26.53 points, to 3,941.69.
Gold miner Aneka Tambang rose 1.1 percent to 1,880 rupiah, while carmaker Astra International gained 2.3 percent to 78,900 rupiah.
— Kuala Lumpur added 0.51 percent, or 7.74 points, to 1,521.29.
Financial firm CIMB Group Holdings gained 0.29 percent to 6.91 ringgit, while gaming giant Genting Malaysia added 4.12 percent to 4.04 ringgit and Telekom Malaysia lost 0.41 percent to 4.80 ringgit.
— Bangkok was 0.86 percent, or 9.26 points, higher at 1,083.97.
