Markets warm to word of Greek deal
THE relief rally that markets enjoyed on Friday extended into yesterday, when the news filtered in that the European authorities have managed to hammer out some kind of settlement with Greece.
The outcome was a 0.96 per cent or 31.34-point rise in the Straits Times Index (STI) to 3,311.22, albeit one that came with low volume of 1.4 billion units.
In the morning session, there was a sense that no matter how bad things might look, the authorities would surely pull out all the stops to avoid the disaster of a Greek exit.
It was this hope of an eventual settlement that added about 16 points to the STI at noon; by the time news came that some sort of agreement had been struck, the index added a further 16 points.
About $531 million or 61 per cent of total volume was done in the 30 STI components. The average value per unit traded was 62 cents, pointing to a penny stock-dominated session. This was borne out from a glance at the top 20 actives: 16 were priced under 50 cents.
The main support for the STI came from the banks, all three closing higher. Also lending its weight to pushing the index into the black was Singtel and the Singapore Exchange.
Among the index decliners was Genting Singapore. Its fall to an intra-day low of 87.5 cents would surely have been disappointing to observers who had come to believe that 90 cents was the counter's bottom. Genting ended a net 0.5 cent weaker at 89 cents on volume of 19.6 million.
Other Asian markets rose yesterday as European leaders said they had agreed on a debt deal to keep Greece in the euro zone, while Shanghai advanced for a third straight session after witnessing fierce volatility recently.
Tokyo rose 1.57 per cent, or 309.94 points, to 20,089.77 and Seoul jumped 1.49 per cent, or 30.25 points, to 2,061.52.
Shanghai climbed 2.39 per cent, or 92.58 points, to 3,970.39 and Hong Kong was up 1.3 per cent, or 322.73 points, at 25,224.01.
However, Sydney gave back early gains to end 0.34 per cent, or 18.8 points, down at 5,473.2.
Tokyo, Sydney and Seoul closed before the deal was announced.
"The market had started pricing in fears that we're going to see a terrible outcome from China and Greece, but we've started feeling more optimistic now," Koichi Kurose, Tokyo-based chief market strategist at Resona Bank, told Bloomberg News.
Shanghai extended a rebound from the end of last week, after almost a month of heavy losses that saw it sink about 30 per cent, wiping trillions off valuations. Investors were settled by government moves last week to prevent a market crash.
About 400 firms began trading again yesterday after almost half the market was suspended last week to prevent a further meltdown.
THE BUSINESS TIMES, AGENCE FRANCE-PRESSE