Asia follows US, Europe higher on Greece hopes
Most Asian markets climbed Tuesday on growing hopes that Greece and its creditors will finally hammer out a debt reform deal that will avoid a default and possible eurozone exit.
The gains tracked a record close for the Nasdaq on Wall Street while European markets also soared, including a nine percent surge in Athens. But the euro retreated in Japanese trade as investors await the next move.
Investors were also cheered by preliminary figures suggesting a contraction in Chinese manufacturing activity may be easing.
Tokyo soared 1.87 percent, or 381.23 points, to end at 20,809.42, breaking through 20,700 for the first time since April 2000.
Sydney advanced 1.32 percent, or 74.10 points, to 5,684.3 and Seoul closed up 1.27 percent, or 26.04 points, at 2,081.20.
Shanghai, which plunged more than 13 percent last week before a long weekend, ended 2.19 percent higher, adding 98.13 points to 4,576.49. Hong Kong rose 0.93 percent, or 252.61 points, to 27,333.46.
Eurozone leaders said they were confident they would bring an end to the five-month crisis over Greece’s bailout reform after it submitted proposals aimed at freeing up much-needed cash to help it pay its bills.
Cash-strapped Greece is at risk of defaulting on a 1.5-billion-euro (US$1.7 billion) IMF payment on June 30 if it fails to reach a deal. That could lead to it crashing out of the eurozone and even the European Union.
After an emergency summit in Brussels on Monday, eurozone chiefs told their finance ministers to hold fresh talks on Wednesday to thrash out details of an accord before a summit of the 28 EU leaders on Thursday.
EU sources told AFP that Greece had now met 90 percent of the conditions set by its creditors, while European Commission chief Jean-Claude Juncker told a news conference he was “convinced” a deal would be done.
However, a Greek bank source said the European Central Bank ( ECB) would make available emergency liquidity funds for the country’s lenders for a fourth time since Wednesday.
The move, providing an unspecified amount, comes as Greek savers continue withdrawing cash in large volumes owing to fears about a default.
On Wall Street Monday the Nasdaq rose 0.72 percent to a new record, the Dow added 0.58 percent and the S&P 500 advanced 0.61 percent.
Athens rocketed 9.0 percent, while there were also big gains across Europe’s other major markets, which were extended in early trade Tuesday.
Buying on Tuesday was also supported by HSBC’s early June reading of China manufacturing. Its purchasing managers’ index came in at 49.6, just below the 50 mark that separates contraction from growth but up from May’s 49.2. It also beat a forecast of 49.4 by economists surveyed by Bloomberg.
The figures fuel hopes the world’s number two economy may be about to pick up after a series of interest rate cuts in response to a sharp slowdown over the past several quarters.
Gold fetched US$1,184.38 compared with US$1,192.86 late Monday. In other markets: — Wellington was flat, edging up 0.08 points to 5,772.13.
Air New Zealand was up 1.00 percent at NZ$2.525 and Contact Energy slipped 1.35 percent to NZ$5.12.
— Manila closed 0.76 percent lower, giving up 57.58 points to 7,551.56.
— Mumbai inched marginally higher by 0.27 percent, or 74.16 points, to end 27,804.37 points.
Coal India gained 3.85 percent to 415.15 rupees, while Infosys fell 2.27 percent to 1,001.15 rupees.
— Malaysia’s key index lost 0.34 percent, or 5.90 points to 1,726.86.
Maybank dropped 0.64 percent to 9.28 ringgit, Tenaga Nasional fell 0.31 percent to 13.06 ringgit while Genting Malaysia gained 0.24 percent to 4.22 ringgit.
— Bangkok slipped 0.06 per- cent, or 0.83 percent, to close at 1,503.23
Coal producer Banpu lost 0.97 percent, or 0.25 baht, to 25.50, while Bangkok Bank edged down 0.28 percent, or 0.50 baht, to close at 178.00.
— Singapore closed up 0.74 percent, or 24.65 points, to 3,339.78.
United Overseas Bank gained 1.04 percent to SG$23.27 while oil rig maker Keppel Corp. fell 0.12 percent to SG$8.40.
— Jakarta ended down 0.44 percent, or 21.60 points, at 4,937.65.
Private hospital group Siloam International Hospitals gained 1.87 percent to 13,600 rupiah, while auto company Astra International slipped 2.50 percent to 6,825 rupiah.