Asia stocks hit by Greek fears, Shanghai up

HONG KONG: Asian markets slipped yesterday on renewed fears Greece will default on its debt obligations, but Shanghai rallied on fresh easing hopes after Chinese data showed inflation at its lowest level in more than five years.

Investors took their cue from New York and Europe as the new anti-austerity government in Athens refused to back down on demands to renegotiate its bailout, putting it on a collision course with its creditors.

Tokyo slipped 0.33%, or 59.25 points, to 17,652.68, Seoul shed 0.57%, or 11.14 points, to 1,935.86 and Sydney eased 0.25%, or 14.3 points, to 5,800.6.

Hong Kong was flat, edging up 7.10 points to 24,528.10 while Shanghai surged 1.50%, or 46.47 points, to 3,141.59.

Greece’s newly elected far-left leaders have pledged to stick to their demands for a renegotiation of the country’s stringent bailout demands, which they describe as “toxic”.

Ahead of a European Union summit tomorrow, Prime Minister Alexis Tsipras and his Finance Minister Yanis Varoufakis are asking for bridging loans so they can come up with an austerity-free reform deal to run from September 1.

But European Commission chief Jean-Claude Juncker warned he did not expect any new deal to be reached at the meeting in Brussels, despite Tsipras saying he was “optimistic that we can reach a compromise”.

German Chancellor Angela Merkel on Monday pressed Greece to present a “sustainable” finance plan, as Athens’ insistence sparked fresh fears of a euro exit.

On Wall Street, the Dow fell 0.53%, the S&P 500 dropped 0.42% and the Nasdaq eased 0.39%. Earlier, key markets in London, Frankfurt and Paris ended lower, while Athens ended down almost five percent.

The euro managed to hold up, buying $1.1330 and 134.53 yen, compared with $1.1325 and 134.35 yen in New York The dollar was at 118.74 yen against 118.64 yen. Shanghai advanced on hopes for more monetary easing after data showed inflation in China had tumbled to 0.8% in January, well down from 1.5% in December and the lowest since November 2009.

On Tuesday, US benchmark West Texas Intermediate for March delivery fell 56 cents to $52.30, while Brent crude for March eased 59 cents to $57.75.

However, the IEA said prices would only partially recover after their recent sharp falls of more than 50% since June. Citing a major shakeup in the oil markets, it said in its five-year forecast that crude prices will climb to around $73 a barrel by 2020.