Asian shares mostly higher on Greek debt hopes
HONG KONG—Growing optimism that European officials are close to a plan to help Athens solve its debt crisis boosted most Asian stocks on Tuesday, but fears over a Greek strike weighed on sentiment.
Global market focus was on Athens, where parliament will vote this week on a batch of austerity measures that key lenders say is necessary for the release of much-needed funds to help the country avoid defaulting on its debts.
Many fear that a default in Greece could lead to similar problems in other economies and cause another global financial crisis.
But concerns eased on reports that banks and EU officials were close to a “Plan B” where the banks would roll over a huge portion of Greek debt into new 30-year bonds, giving Athens some breathing space.
Tokyo closed 0.74 percent higher, adding 70.67 points to 9,648.98, and Sydney gained 0.21 percent, or 12.5 points, to end at 4,474.3.
Hong Kong ended slightly higher, adding 20.01 points to 22,061.78 and Shanghai ended flat, gaining 0.97 points to 2,759.20, its sixth straight session in positive territory.
However, Seoul pared early gains to close 0.36 percent, or 7.38 points, down at 2,062.91.
While Greek Prime Minister George Papandreou begged parliament Monday to pass the austerity bill to keep the country “on its feet,” European officials were looking into the debt rollover plan to avoid a devastating default.
“The next step is not a default of Greece,” an official said.
The European Union and the IMF have told Athens that it must pass 28.6 billion euros in budget cuts and tax hikes and a 50-billion-euro privatization program before it can receive the next installment of an EU-IMF bailout.
“Market direction will come from Greece rather than data over coming days,” Credit Agricole said in a note to clients, according to Dow Jones Newswires.
It added that “while there is some optimism about debt rollovers, the many and varied uncertainties still to be resolved suggests that any improvement in risk appetite is highly tentative.”
As Greek lawmakers debated the cuts bill, a two-day strike against the measures began to kick in, paralyzing transport and public services, giving investors jitters.
On currency markets the single currency, which jumped in New York trade Monday, edged down to $1.4273 from $1.4277 in Tokyo and but it gained to 115.67 yen from 115.51 yen. The dollar was at 80.80 yen compared with 80.89.
Wall Street was higher on Monday because of the news from Europe. The Dow rose 0.91 percent, the S&P 500 climbed 0.92 percent and the Nasdaq surged 1.33 percent.
Investors there were also upbeat as President Barack Obama became directly involved for the first time in cross-party talks on raising the US debt ceiling, which must be resolved to avoid a US government default by August 2.
Oil edged down further, extending heavy losses from last week, when the International Energy Agency said it would release 60 million barrels of crude to make up for lost Libyan production, while the Greece problems also hit sentiment.
New York’s main contract, West Texas Intermediate (WTI) for delivery in August, was down five cents at $90.56 a barrel in the afternoon, and Brent North Sea crude also for August dipped 31 cents to $105.68.
Gold closed at $1,502-$1,503 an ounce in Hong Kong, up from its Monday close of $1,494-$1,495.
In other markets:
— Taipei fell 21.3 points, or 0.25 percent, to 8,478.86.
Hon Hai was down 1.04 percent at Tw$95.0 while TSMC rose 0.69 percent to Tw$72.5.
— Manila closed flat, edging up 0.70 points to 4,289.99.
Ayala Land was unchanged at 15.30 pesos, Atlas Mining gained 1.75 percent to 20.35 pesos and Philippine Long Distance Telephone added 0.3 percent to 2,400.
— Wellington edged up 0.09 percent, or 2.9 points, to 3,441.01.
Market heavyweight Fletcher Building closed down 1.3 percent at NZ$8.53 and Telecom slipped 1.0 percent to NZ$2.43, while Air New Zealand rose 0.9 percent to NZ$1.12.
— Jakarta rose 16.85 points, or 0.44 percent, to 3,830.27.
Car maker Astra jumped 0.8 percent to Rp 61,500 and food producer Indofood soared 1.8 percent to Rp 5,600. Profit taking hit coal miner Bumi Resources, which fell 0.8 percent to Rp 3,000.
— Singapore closed up 2.51 points, or 0.08 percent, to 3,050.79.
Container shipping firm Neptune Orient Lines fell 0.65 percent to Sg$1.52 and Singapore Telecom rose 0.33 percent to Sg$3.08.
— Kuala Lumpur ended up 0.47 percent, or 7.5 points, to close at 1,570.02.
Finance company RHB Capital climbed 3.9 percent to 9.16 ringgit while property developer UEM Land rose 1.7 percent to 2.87 as developer Berjaya Land slipped 0.9 percent to 1.05 ringgit.
— Bangkok edged up 0.31 percent, or 3.18 points, to 1,013.50.
Banpu lost 2 baht to 694, while Siam Cement fell 3 baht to 340.
— Mumbai rose 0.43 percent, or 80.04 points, to 18,492.45.
The Indian arm of British oil explorer Cairn Energy fell 0.58 percent or 1.8 rupees to 307.4, a day after global resources firm Vedanta said it has secured a further ten percent stake in Cairn India, after parent firm Cairn Energy tweaked the terms of the deal.
India’s largest private aluminium producer Hindalco rose 4.15 percent or 7.2 rupees to 180.85 while housing finance firm HDFC rose 2.18 percent or 14.7 rupees to 688.9.
