Asian markets rose yesterday after Greece’s private creditors signed up to a deal that will see them write down most of their debt, paving the way for a second bailout for Athens.
The plan’s success means Greece will be able to avoid a devastating default that many had feared could send ripples around the globe.
And in China data showing inflation has eased further provided some support to sentiment, although the sharpness of the fall tempered excitement amid lingering fears over a slowdown in the mainland economy.
Tokyo stocks rose to close at their highest level in more than seven months. The Nikkei 225 Index gained 1.65 percent, or 160.78 points, to 9,929.74, the best finish since August 1 last year.
The index hit 10,007.62 in mid-afternoon trade, the first breach of 10,000 since August 1, but gave up some of its gains by the close.
Analysts were cool on the surge, with an equity sales trader at a foreign brokerage saying: “The rise through 10,000 is more due to the large amount of structured products with strike prices at 10,000 than to any fundamental optimism about the economy per se.”
Chinese shares closed up 0.79 percent. The Shanghai Composite Index ended up 19.18 points at 2,439.46.
Sydney rose 0.98 percent, or 41.0 points, to 4,212.0 and Seoul gained 0.88 percent, or 17.54 points, to 2,018.30.
HONG KONG: Shares rose 0.89 percent yesterday on news that Greece’s debt swap with private investors had been successful, while it was also lifted by data showing Chinese inflation had slowed further.
The benchmark Hang Seng Index jumped 185.27 points to 21,086.00. For the week, the Hang Seng Index lost 2.2 percent.
SINGAPORE: Southeast Asian stock markets were flat or retreated amid profit-taking yesterday but Philippine and Indonesian shares posted modest gains.
Many market players appeared to stay on the sidelines ahead of US jobs data due out later in the day.
In Singapore, the Straits Times Index closed a choppy session down 0.24 percent, or 7.23 points, at 2,963.15.
KUALA LUMPUR: Share prices on Bursa Malaysia closed mixed yesterday as traders firmed up their positions ahead of the weekend, dealers said.
The benchmark FTSE Bursa Malaysi KLCI inched up 0.64 point to close at 1,579 after having moved between 1,577.23 and 1,582.
A dealer said although strong interest from foreign investors was seen in the market, profit taking offset earlier gains.
In other markets:
* Taipei rose 0.47 percent, or 37.17 points, to 8,021.73.
* Manila gained 0.49 percent, or 24.52 points, to 4,980.71.
* Jakarta closed 0.60 percent, or 23.88 points, higher at 3,991.54.
* Bangkok was down 0.82 percent, or 9.60 points, at 1,158.71.
* Mumbai jumped 357.72 points or 2.09 percent to 17,503.24, snapping three days of losses.
EUROPE: European stocks traded in a narrow range yesterday morning after Greece’s successful bond swap, with investors turning their attention to US job data to be released later in the day.
“Markets turned moderately positive (after) the closely watched, biggest sovereign debt swap on record,” said Anita Paluch, a trader at Gekko Global Markets.
The FTSEurofirst 300 .FTEU3 index of top European shares was down 0.1 percent at 1,073.90 points at 1130 GMT.
London’s FTSE 100 index edged up 0.03 percent to 5,861.70 points in morning trading, Frankfurt’s DAX 30 gained 0.30 percent to 6,854.92 and in Paris the CAC 40 won 0.05 percent to stand at 3,479.95.
AMERICA: Stocks closed modestly higher Friday after the government’s monthly report on employment bolstered hopes that the economic recovery is on track. The gains were tempered by news that a big debt write-down by Greece could cause big losses for banks.
Three years after stocks hit bottom during the Great Recession, the Dow Jones industrial average rose 14 points and finished the week with a loss of 56. That was after a 203-point dive Tuesday, the worst drop this year.
The Dow was up more than 60 points Friday morning but lost ground in the afternoon after the trade group that oversees financial derivatives said Greece’s bond-swap deal will trigger payouts on bond insurance.
The Dow finished up 14.08 points, or 0.1 percent, at 12,922.02. The Standard & Poor’s 500 gained 4.96, or 0.4 percent, to 1,370.87. The Nasdaq composite average gained 17.92, or 0.6 percent, to 2,988.34.
The Dow has nearly doubled in the three years since its bottom during the financial crisis. On March 9, 2009, it closed at 6,547. The S&P 500 closed that day at 676.
The morning’s gains were driven by news that employers added 227,000 jobs last month, finishing three of the best months for hiring since the recession began. The unemployment rate was unchanged at 8.3 percent because unemployed people started looking for work again, which increased the size of the labor force.
The hiring was spread across a range of industries, including business and professional services, leisure and hospitality and health care.
Later Friday, the International Swaps and Derivatives Association said it had determined that a massive bond-swap by Greece constituted a “credit event,” meaning that holders of credit-default swaps on their Greek bonds will be able to claim insurance payments. Traders sold stocks on the news, fearing big losses for banks that had sold the insurance.
Greece convinced most of its private creditors to swap their bonds for new ones worth far less. The deal clears the way for a fresh bailout from Greece’s neighbors. Fears of a disorderly Greek default have weighed on the market for two years.
“There’s a lot less imbalance and a lot less uncertainty than there was three years ago,” said John Canally, investment strategist with LPL Financial Corp. Canally said the odds of another recession have been dropping as the economic recovery strengthens and becomes less vulnerable to shocks.
For the week, the Dow lost 55.55 points, or 0.4 percent. It was the second straight week of modest losses for the Dow, which closed above 13,000 last week for the first time since May 2008.
Canally said investors should be prepared for the stock market’s rally to fade after significant gains so far this year. He said his firm had slowed stock purchases because the market had gained as much in two months as he expected it to gain all year. The Dow is up 6 percent for the year, the S&P 500 9 percent.
European stocks added to their gains after the U.S. market opened. France’s benchmark indexes closed 0.3 percent higher, Britain’s 0.5 percent higher and Germany’s 0.7 percent higher.
Also Friday, the Commerce Department said the U.S. trade deficit surged in January to the widest imbalance in more than three years as imports hit an all-time high, reflecting rising demand for foreign-made cars, computers and food products.
Exports to Europe fell, raising concerns that economic contraction across most of the continent will hurt U.S. corporate profits.
Benchmark Currency Rates USD EUR JPY GBP CHF CAD AUD HKD HKD 7.7580 10.1812 0.0941 12.1600 8.4438 7.8328 8.2048 - AUD 0.9455 1.2409 0.0115 1.4821 1.0291 0.9547 - 0.1219 CAD 0.9905 1.2998 0.0120 1.5525 1.0780 - 1.0475 0.1277 CHF 0.9188 1.2058 0.0111 1.4401 - 0.9276 0.9717 0.1184 GBP 0.6380 0.8373 0.0077 - 0.6944 0.6441 0.6747 0.0822 JPY 82.4620 108.219 - 129.253 89.7516 83.2571 87.2118 10.6293 EUR 0.7620 - 0.0092 1.1944 0.8294 0.7693 0.8059 0.0982 USD - 1.3123 0.0121 1.5674 1.0884 1.0096 1.0576 0.1289 Bloomberg