Asian stocks higher after Wall Street rally

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HONG KONG: Asian markets rallied on Thursday following a strong close on Wall Street and hopes for a Greek debt deal, while the dollar recovered after the previous day’s sharp losses.

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Tokyo climbed 1.68 percent, or 336.61 points, to 20,382.97 thanks to a weaker yen and Sydney added 1.43 percent, or 78.10 points, to 5,556.70.
Seoul ended 0.26 percent higher, adding 5.29 points to 2,056.61, after the central bank cut its key interest rate in a bid to boost the economy, which has been hit by an outbreak of the deadly MERS virus.

Shanghai reversed morning losses to close up 0.30 percent, or 15.56 points, at 5,121.59 while Hong Kong tacked on 0.83 percent, or 220.21 points, to close at 26,907.85.

The three main indexes in New York enjoyed one of their best days for weeks thanks to a surge in banking and technology stocks as well as optimism over the Greek debt crisis.

Dealers welcomed news German Chancellor Angela Merkel and French President Francois Hollande would meet Greek Prime Minister Alexis Tsipras at an EU-Latin America summit, encouraging hopes for a deal to extend Greece’s bailout funding.

The Dow jumped 1.33 percent, the S&P 500 rose 1.20 percent and the Nasdaq gained 1.25 percent.

Later in the day the three European leaders said they had agreed to work harder for a deal that will unlock billions of euros much needed by Athens to service its debts and avert a default that could see it tumble out of the eurozone.

“We decided to intensify efforts to resolve the differences that remain and to move towards a solution,” leftist leader Tsipras told reporters after the three-way meeting broke up without a deal.

However, analysts said traders remained nervous ahead of a key repayment deadline for Athens at the end of the month.

“We’re coming to a stage where a decision has to be made on Greece,” Matthew Sherwood, head of investment markets research at Perpetual Ltd., told Bloomberg News.

Dollar rebounds
“Markets are on edge, hoping that some stop-gap measure could be agreed. We could see a continued sell-off in equities if Greece defaults.”
On currency markets, the euro was at $1.1300 and 139.33 yen against $1.1324 and 138.92 yen in New York.

The dollar rebounded against the yen after taking a hit Wednesday in reaction to comments from Japan’s central bank chief that the country’s currency was “unlikely” to slide further. The comments saw the dollar fall to 122.70 yen from 124.50 yen.

However, the greenback edged up to 123.44 yen in Tokyo Thursday from 122.67 yen in US trade.

In Seoul, a surprise interest rate cut from the South Korean central bank offset fears over the impact of a deadly MERS virus outbreak that has already hit businesses in the country.

The bank announced the move in an attempt to ward off further economic pain from the largest outbreak of Middle East Respiratory Syndrome (MERS) outside Saudi Arabia, which has killed 10 people so far and infected 122.
Businesses including shopping malls, restaurants and cinemas have reported a sharp drop in sales as people shun public venues with large crowds. More than 54,000 foreign travellers have also cancelled visits this month.

Oil prices fell after a mixed US inventory report that showed a large dip in crude reserves, but record-high production. US benchmark West Texas Intermediate for July delivery fell six cents to $61.37 while Brent crude for July added eight cents to $65.78.

Gold fetched $1,179.55 compared with $1,188.80 late Wednesday.

AFP

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