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Asian shares rise on Greece debt-swap success

/ 09:55 PM March 09, 2012

HONG KONG – Asian markets rose Friday after Greece’s private creditors signed up to a deal that will see them write down most of their debt, paving the way for a second bail-out for Athens.

The plan’s success means Greece will be able to avoid a devastating default that many had feared could send ripples around the globe.

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And in China data showing inflation has eased further provided some support to sentiment, although the sharpness of the fall tempered excitement amid lingering fears over a slowdown in the mainland economy.

Tokyo rose 1.65 percent, adding 160.78 points, to 9,929.74, Sydney advanced 0.98 percent, or 41.0 points, to 4,212.0 and Seoul gained 0.88 percent, or 17.54 points, to 2,018.30.

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Hong Kong rose 0.89 percent, or 185.27 points, to 21,086.00 and Shanghai closed 0.79 percent, or 19.18 points higher at 2,439.46.

Athens passed the crucial debt swap test with 83.5 percent of bondholders saying they were willing to accept losses of more than 50 percent on their investments to ease the nation’s debt burden.

The take-up easily beat the minimum 75 percent needed in order for the plan to work and qualify Greece for a much needed rescue package.

The writedown will see almost a third slashed from the country’s 350-billion-euro debt mountain.

The news lifted US markets on Thursday. On Wall Street the Dow was up 0.54 percent, the broad-based S&P 500 added 0.98 percent and the Nasdaq gained 1.18 percent.

On currency markets the euro jumped more than a cent against the dollar and also rose against the yen in New York as risk sentiment was put back on track.

In early European trade the single currency held up, buying $1.3214 and 108.03 yen, compared with $1.3274 and 108.28 yen in New York late Thursday. The dollar was at 81.74 yen, compared with 81.56 yen.

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The “market mood remains ebullient, buoyed by Greece’s avoidance of a hard default,” Stewart Hall, senior currency strategist at RBC Capital Markets, said in a note.

Eyes will now turn to the United States, where the Department of Labor is due to release closely watched non-farm jobs figures for an idea of the strength of the world’s biggest economy.

A run of strong figures in recent months has fuelled hopes that the recovery is gaining traction.

In China, official data showed inflation slowed in February to 3.2 percent — the lowest since June 2010.

The figure was well down from January’s 4.5 percent, when spending before the Lunar New Year holiday drove up prices but continues a downward trend since inflation hit a three-year high of 6.5 percent in July.

“The CPI data came in below market expectations, and that is certainly contributing to investors’ growing expectations of further monetary loosening,” Dongxing Securities analyst Shen Gang told Dow Jones Newswires.

Oil prices were mixed, with New York’s main contract, West Texas Intermediate crude for delivery in April, up 42 cents to $107.00 per barrel while Brent North Sea crude for April was down six cents at $125.38.

Gold was at $1,699.10 an ounce at 1103 GMT, compared with $1,701.90 late Thursday.

In other markets:

— Singapore closed down 0.24 percent, or 7.23 points, at 2,963.15.

Vehicle distributor Jardine Cycle and Carriage gained 0.43 percent to Sg$47.20 while palm oil producer Wilmar International was up 1.02 percent at Sg$4.95.

— Taipei rose 0.47 percent, or 37.17 points, to 8,021.73.

Hon Hai added 0.5 percent to Tw$101.5 while Chunghwa Telecom was 0.33 percent lower at Tw$91.3.

— Manila gained 0.49 percent, or 24.52 points, to 4,980.71.

Philippine Long Distance Telephone rose 0.22 percent to 2,758 pesos, while Aboitiz Power added 1.06 percent to 33.20 pesos.

Metropolitan Bank dropped 0.55 percent to 81.90 pesos.

— Wellington closed 0.59 percent, or 20.03 points, higher at 3,433.82.

Telecom climbed 2.4 percent to a three-year-high of NZ$2.39, Chorus gained 2.9 percent to NZ$3.50 and New Zealand Oil & Gas added 2.7 percent to NZ$0.77.

— Kuala Lumpur was flat, edging up 0.64 points to 1,579.00.

Hong Leong Bank lost 1.0 percent to 12.26 ringgit, while UEM Land Holdings inched down 0.9 percent to 2.28 ringgit and utility Tenaga Nasional gained 1.3 percent to 6.34 ringgit.

— Jakarta closed 0.60 percent, or 23.88 points, higher at 3,991.54.

Bank Rakyat gained 0.8 percent to 6,450 rupiah and car maker Astra was up 0.5 percent at 70,200 rupiah.

— Bangkok was down 0.82 percent, or 9.60 points, at 1,158.71.

Banpu lost 1.89 percent to 622 baht, while PTT dropped 1.68 percent to 351 baht.

— Mumbai jumped 357.72 points or 2.09 percent to 17,503.24, snapping three days of losses, led by buying in index heavyweights.

The world’s seventh-largest steel maker Tata Steel rose 6.74 percent to 453.7 rupees while private bank ICICI Bank jumped 6.22 percent to 914.7.

Shares in Multi-Commodity Exchange of India (MCX), the first exchange in the country to be listed, closed at 1,297 rupees in their trading debut — nearly 26 percent higher than its IPO price.

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