Asian stocks mostly higher on Greek debt vote
HONG KONG—Asian shares were mostly higher Monday after Greek lawmakers approved a package of drastic austerity measures amid violent street battles between police and protesters on the streets of Athens.
The vote, which came as tens of thousands demonstrated against the unpopular cuts, was a key chapter in Greece’s fiscal saga with lawmakers racing to secure a second bailout package, and avoid defaulting on the nation’s massive debt.
Tokyo shares closed up 0.58 percent, or 52.01 points, at 8,999.18, Sydney added 0.94 percent, or 39.8 points, to 4,285.1, while Seoul ended 0.6 percent, or 12.03 points, higher at 2,005.74.
Hong Kong stocks closed 0.50 percent higher, or 103.54 points, at 20,887.40 while Shanghai shares closed flat, edging down 0.13 points at 2,351.86.
The euro rose on the budget cut deal reached late Sunday but the single currency’s rise was tempered by uncertainty over implementation of the austerity plan and ongoing talks between Athens and its private creditors.
“Greece’s approval of austerity measures will bode well for markets but the tough stance of EU officials towards Greek austerity implementation means that focus will turn to yet another extraordinary meeting of European officials on Wednesday,” said Mitul Kotecha, strategist at Credit Agricole.
“Even assuming that some form of a debt deal and second bailout package is ironed out, it is questionable how much the euro will rally as so much good news is already in the price,” he told Dow Jones Newswires.
Eurozone finance ministers will meet Wednesday in Brussels to sign off on the deal necessary for a Europe-sponsored rescue package, followed by an offer to private sector holders of Greek government bonds.
The debtholders will be asked to exchange their existing bonds for new bonds with half the face value, chopping about 100 billion euros off Greece’s 350 billion euro ($463 billion) debt mountain.
Greece must make the offer by Friday at the latest to complete its debt writedown – and receive the fresh bailout package – before a looming March 20 bond redemption, when the government must repay 14.5 billion euros.
Greek premier Lucas Papademos said that the deeply unpopular cuts must go ahead as the country races to pay its bills.
“A disorderly default would throw the country into a disastrous adventure. It would create conditions of uncontrollable economic chaos and social eruption,” the prime minister said, as he appealed for calm.
Meanwhile, some protesters brandished homemade flame throwers, in addition to petrol bombs, as storefronts burned, with masked protesters trying to break through the riot police cordon around parliament where lawmakers were voting.
The civil protection ministry counted about 40 fires in Athens, while authorities said 54 people were injured in the day’s events.
The austerity cuts include a 22-percent reduction in the minimum wage, labor market deregulation which would make it easier to lay off workers, and a package of tax and pension reforms.
In Tokyo, the government said Japan’s economy shrank by an annualized 2.3 percent in the October to December quarter, weaker than analysts had expected, as exports faltered amid weak overseas demand, the strong yen and record flooding in Thailand.
Also Monday, Australia’s ANZ Bank announced it will slash about 1,000 jobs in response to a tougher global environment, sparking an angry response from the industry’s union and threats of possible labor action.
European markets climbed in Monday’s early trade, with London’s benchmark FTSE 100 index jumping 1.02 percent, Frankfurt’s DAX 30 adding 1.06 percent while in Paris the CAC 40 advanced 1.03 percent.
In currency markets, the euro rose to $1.3259, from $1.3181 late Friday in New York, and to 102.995 yen from 102.47 yen.
The dollar bought 77.68 yen, even with its New York level.
New York’s main oil contract, light sweet crude for delivery in March, gained 25 cents to $99.62 a barrel. Brent North Sea crude for March delivery shed 55 cents to $117.55.
Gold was at $1,728.69 an ounce at 1110 GMT, against $1,722.10 late Friday.
IN OTHER MARKETS:
— Taiwan shares rose 0.64 percent, or 50.64 points, at 7,912.91.
MediaTek was 7.0 percent limit-up at Tw$311.5 while Taiwan Semiconductor Manufacturing Co. was 0.39 percent lower at Tw$76.6.
— Singapore closed 0.55 percent higher, or 16.34 points, at 2,976.34.
Singapore Telecom climbed 1.95 percent to Sg$3.13 and DBS Bank advanced 0.37 percent to Sg$13.60.
— India rose 0.14 percent, or 24.15 points, to close at 17,772.84.
Leading motorcycle maker Hero Motocorp rose 2.41 percent to 2,017.2 rupees while the largest private aluminium producer Hindalco rose 1.9 percent to 155.9.
— Indonesian shares closed up 1.27 percent, or 49.5 points, at 3,961.902.
Carmaker Astra rose 3.0 percent at 73,350 rupiah, Bank Rakyat was also 3.0 percent higher at 6,850 rupiah, while Bank Mandiri added 3.3 percent to 6,350 rupiah.
— Malaysian shares closed up 0.10 percent, or 1.16 points, at 1,562.82.
MMC Corp. lost 1.0 percent to 2.97 ringgit, CIMB Group shed 0.7 percent to 7.16 ringgit and AirAsia dipped 0.5 percent to 3.76 ringgit.
— Wellington shares fell 0.18 percent, or 6.14 points, to 3,342.0
Telecom Corp. slipped 0.5 percent to NZ$2.135 and Air New Zealand was down 1.7 percent at NZ$0.90, while Fletcher Building remained steady at NZ$6.73.
— Philippine shares gained 0.39 percent, or 18.51 points, at 4,802.03.
Philippine Long Distance Telephone Co. rose 0.88 percent to 2,758 pesos while conglomerate Ayala Corp. rose 3.31 percent to 399 pesos.
— Bangkok edged up 0.40 percent, or 4.49 points, to 1,117.40.
Banpu gained 1.60 percent to 636 baht, while PTT lost 0.57 percent to 346 baht.
