Jun 25, 2015

    Asian markets rise as Grexit fears recede


    ASIAN markets rose for a third straight day yesterday, with Singapore slightly up and Tokyo hitting a more than 18-year high, on confidence that Greece will finally hammer out a bailout reform deal with creditors and avert a default.

    With expectations high that a last-minute agreement will be reached, the euro resumed its downward spiral against the dollar as traders turned their attention to a possible United States rate rise and European monetary easing.

    In Singapore, the Straits Times Index finished 11.55 points or 0.4 per cent higher at 3,351.33. Besides optimism over Greece's debt situation, the firmer closing was fuelled by a mildly higher closing on Wall Street overnight.

    Turnover stood at 1.4 billion shares worth $1.05 billion. Gainers led losers with 273 counters up and 163 counters down.

    Agribusiness company Wilmar International fell 0.3 per cent to $3.30 while media group Singapore Press Holdings gained 0.48 per cent to $4.15.

    Tokyo climbed 0.28 per cent, or 58.61 points, to 20,868.03, its best finish since December 1996.

    Shanghai piled on 2.48 per cent, or 113.66 points, to 4,690.15 - extending Tuesday's 2.19 per cent gain - after plunging more than 13 per cent last week. Analysts said the market is benefiting from the release of cash that had been tied up for a recent batch of initial public offerings.

    Hong Kong advanced 0.26 per cent, or 71.51 points, to 27,404.97.

    Sydney was flat, adding 2.5 points to close at 5,686.8, and Seoul was 0.21 per cent, or 4.33 points, higher at 2,085.53.

    Global equity markets are on a roll this week after Greece over the weekend submitted bailout proposals that were welcomed by creditors.

    Euro-zone finance ministers were to meet yesterday to work on details of the new plan, before a full European Union (EU) summit is held the day after.

    However, Greece's leaders - elected on an anti-austerity platform - cautioned they had to get any agreement through Parliament, with some members of the ruling party claiming red lines on some issues such as tax had been crossed.

    Greece must unlock billions of euros in aid before a Tuesday deadline to repay an International Monetary Fund debt. If it fails, it will default, with some warning that it could be ejected from the EU.

    Markets appear to have taken the view that an agreement in Greece "is a foregone conclusion", Ric Spooner, chief market analyst in Sydney at CMC Markets, told Bloomberg News.

    "Markets have now focused back on what they were focusing on prior to real concerns developing about Greece, and that is the adjustment for the potential for higher interest rates."

    On Wall Street on Tuesday, the Dow added 0.13 per cent and the S&P 500 nudged up 0.06 per cent. The Nasdaq put on 0.12 per cent to end at another record for a second day in a row.

    In Europe, Athens rose more than 6 per cent, adding to a 9 per cent gain on Monday.

    There were also advances in Paris, Frankfurt, London, Lisbon, Rome and Madrid.

    "Markets are pretty content with the idea that Greece and its creditors will do a deal before the June 30 deadline" on repaying massive debts, said Emma Lawson, senior currency strategist at National Australia Bank.