Asian markets mixed as Greek woes stoke caution
HONG KONG—Asian stock markets were mixed on Monday as earlier gains were pared by concerns that Greece’s debt crisis will not likely be resolved in the near future.
After seven hours of crunch talks aimed at averting Greek default – and the possible domino effect across their shared currency area – eurozone finance ministers told Greece they and the IMF would release 12 billion euros of loans in “mid-July.”
Athens has struggled under the weight of huge debts and rocketing bond prices, with ongoing talk of its inability to pay further worsening the situation and sending jitters around the financial world.
But the carrot comes with a heavy stick – squabbling Greek lawmakers must endorse stringent austerity measures aimed at reining in profligate state spending, or lose the cash.
European ministers also agreed on a roadmap for a second, 100-billion-euro ($156 billion) bailout, which would involve not only taxpayers’ money but also a “substantial” contribution via the “informal and voluntary rollovers of existing Greek debt at maturity” by private banks, pension funds and insurers.
Despite an upbeat start in Asia, caution set in later in the day as dealers fretted that Athens may not be able to meet the rules set out to receive its cash.
Tokyo was flat, adding just 2.92 points to close at 9,354.32, Sydney shed 0.74 percent, or 33.2 points, to finish at 4,451.7 and Seoul closed 0.60 percent, or 12.28 points, lower at 2,019.65.
Hong Kong fell 0.44 percent, or 95.75 points, to 21,599.51.
Shanghai – where the focus was on the rising value of the yuan – shed 0.82 percent, or 21.57 points, to 2,621.25 with exporters hit over fears that their products will become more expensive as the local currency strengthens.
“All eyes remain on Greece but news this morning that the Eurogroup’s final decision on the country’s second bailout package has been delayed until early July will result in more uncertainty filtering through markets,” Credit Agricole said in a note.
“Consequently the tone this week is likely to be cautious, with risk aversion remaining elevated.”
Markets worry a default on Greek debt could trigger a cascade of problems in Europe’s bigger economies, including Spain. Such a domino effect could again hobble the global financial system, much like the massive crisis of 2008.
Showing the extent of international fears over renewed financial contagion, G7 finance ministers from Britain, Canada, France, Germany, Italy, Japan and the United States held a late-night telephone conference to discuss the Greek debt crisis.
Local markets had been given a positive lead from Wall Street, where the Dow Jones Industrial Average climbed 0.36 percent Friday and the S&P 500 index rose 0.30 percent.
The recent drop in the price of oil was seen as giving a fillip to the beleaguered US consumer.
The overall downward trend for oil continued Monday in Asia with New York’s main contract, West Texas Intermediate (WTI) light sweet crude for July delivery, falling $1.39 to $91.62 a barrel in the afternoon.
Brent North Sea crude for delivery in August slipped $1.21 to $112.
Forex traders were unconvinced by the bailout talk, citing uncertainty until the mid-July payout is made to Greece.
The euro fell to $1.4213 in Tokyo morning trading from $1.4301 in New York late Friday. The European single currency also sagged to 113.88 yen from 114.46 yen. The dollar firmed to 80.13 yen from 80.03 yen.
Gold closed in Hong Kong at $1,537-$1,538 an ounce, up from Friday’s close of $1,524-$1,525.
In other markets:
— Singapore closed up 0.28 percent, or 8.32 points, at 3,013.60.
Singapore Airlines fell 0.29 percent to Sg$13.86 and DBS Group Holdings rose 1.14 percent to Sg$14.16.
— Taipei closed 1.22 percent, or 105.42 points, lower at 8,530.68.
Leading flat screen maker AU Optronics Corp. lost 5.12 percent to Tw$19.45 while Hon Hai Precision, the parent company of tech giant Foxconn, was 0.3 percent lower at Tw$98.4.
— Wellington was flat, edging down 2.10 points to 3,467.49.
Fletcher Building fell 0.7 percent to NZ$8.56 and Telecom rose 0.8 percent to NZ$2.40.
— Kuala Lumpur fell 0.27 percent, or 4.24 points, to 1,559.19.
RHB Capital lost 1.9 percent to 9.56 ringgit, Malayan Banking shed 1.9 percent to 8.83 ringgit and CIMB Group dipped 0.7 percent to 8.49 ringgit.
Hong Leong Financial Group added 2.8 percent to 13.00 ringgit.
— Jakarta rose 0.18 percent, or 6.82 points, to 3,729.12.
Gudang Garam rose 2.3 percent to 45,300 rupiah, Bank Mandiri gained 0.7 percent to 6,850 rupiah and coal producer Bumi lost 2.5 percent to 2,975 rupiah.
— Bangkok fell 0.58 percent or 5.87 points to 1,013.09.
Banpu lost 6 baht to 710, while PTT fell 1 baht to 329.
— Mumbai lost 2.04 percent, or 363.90 points, to 17,506.63.
— Manila was closed for a public holiday.
