Asia stocks boosted by Greek debt deal hopes

19-Feb-2015 Intellasia | Business Times | Reuters | AFP | Bloomberg | AP | 7:18 AM Print This Post

Asian markets rallied and the euro held up Wednesday February 18 on hopes of a settlement in Greece’s debt stand-off after it emerged that the country will ask for an extension to its bailout and avoid a painful eurozone exit.

Another record close on Wall Street also provided support, although trade was thin with some markets closed and others winding down for the Lunar New Year holiday.

Tokyo rallied 1.18 percent, or 212.08 points, to 18,199.17, while Hong Kong ended up 0.14 percent, or 47.20 points,at 24,832.08. Singapore added 0.58 percent, or 19.75 points, to 3,435.66 in abbreviated trading.

Sydney rose 0.98 percent, or 57.5 points, to close at 5,915.7, with logistics firm Toll Holdings surging almost 50 percent on news Japan Post offered to buy the firm in a deal worth more than $5 billion.

Shanghai, Seoul and Taipei were closed for public holidays.

Greek public television said Tuesday that the new government would apply for further aid from its European partners, but would not sign up to the painful austerity measures imposed on the country.

And in an interview with German public broadcaster ZDF Greek Finance Minister Yanis Varoufakis said: “We should extend the credit programme by a few months to have enough stability so that we can negotiate a new agreement between Greece and Europe.”

The news will come as a relief after two eurozone finance ministers’ meetings in the past week both collapsed without agreement, as Athens refused to continue with the bailout that imposed swingeing spending cuts and tax hikes.

The apparent change of face also comes days before its financial lifeline package expires, which would leave the country without any cash and unable to pay its bills, leading it to default and almost certainly an exit from the eurozone.

Investors bought up the euro on the reports and it held the gains in Asia.

The single currency fetched $1.1407 and 135.80 yen Wednesday, down from $1.1413 and 136.13 yen in New York afternoon but well above the $1.1357 and 134.70 yen quoted in Tokyo earlier Tuesday.

The dollar fetched 119.00 yen from 119.29 yen in New York and 118.55 yen in Tokyo on Tuesday.

US shares resumed their record-breaking run Tuesday after they were closed Monday for a public holiday.

The S&P 500 climbed 0.16 percent to a second straight all-time high, while the Dow added 0.16 percent. The Nasdaq was up 0.11 percent.

Oil prices, which have enjoyed a small recovery over the past week, eased. US benchmark West Texas Intermediate fell 37 cents to $53.16 while Brent eased 35 cents to $62.18.

Gold fetched $1,205.48 an ounce, against $1,220.88 on Tuesday.

In other markets:

- Mumbai rose 0.63 percent, or 184.38 points, to end at 29,320.26 points.

Housing Development Finance Corporation rose 2.96 percent to 1,326.20 rupees, while motorbike major Hero Motocorp fell 5.09 percent to 2,663.45 rupees.

- Bangkok climbed 0.97 percent, or 15.39 points, to 1,603.14.

Supermarket operator Big C Supercenter rose 3.06 percent to 236.00 baht, while Airports of Thailand gained 1.95 percent to 313.00 baht.

- Jakarta ended up 0.99 percent, or 52.95 points, at 5,390.45.

Lender Bank Rakyat Indonesia gained 3.96 percent to 12,475 rupiah, while coal miner Bukit Asam slipped 1.81 percent to 10,875 rupiah.

- Kuala Lumpur’s main stock index lost 0.12 percent, or 2.22 points, to close at 1,807.87.

Public Bank eased 1.29 percent to 18.30 ringgit, Sime Darby dipped 0.32 percent to 9.47 while Malayan Banking added 0.22 percent to 9.22 ringgit.

- Wellington fell 0.15 percent, or 8.85 points, to 5,741.36.

Fletcher Building slumped 5.03 percent to NZ$8.30 after a disappointing half-year result, while Air New Zealand edged down 0.19 percent to NZ$2.62.

AMERICA: The Dow and S&P 500 ended barely lower on Wednesday after a drop in energy shares but declines were limited by minutes from the latest Federal Reserve meeting, which showed policymakers are concerned about raising interest rates too soon.

Exxon Mobil, which fell 2.2 percent to $91.01, was the biggest drag on both the S&P 500 and Dow following an explosion and fire at an Exxon refinery near Los Angeles and a drop in crude oil prices. Also, Berkshire Hathaway disclosed shedding a $3.74 billion investment in Exxon.

The S&P 500 was down 1.5 percent, with U.S. crude oil falling 2.6 percent to settle at $52.14 a barrel.

Fed policymakers expressed concern last month that raising interest rates too soon could pour cold water on the U.S. economic recovery, according to minutes from the Fed’s Jan. 27-28 meeting.

“The minutes reflect our view that while the economy is growing, an interest rate liftoff is not a slam dunk at this point,” said Alan Gayle, senior investment strategist at RidgeWorth Investments in Atlanta.

“Clearly, there are some more dovish members that feel the economy is still not strong enough to support steady pricing, so that is holding the Fed back from normalizing policy.”

Stocks generally have risen with any sign the Fed could raise rates later rather than sooner.

An index of S&P 500 utilities, which tend to do well in a low interest-rate environment, jumped 2.4 percent and was the biggest positive in the S&P 500 as bond yields declined. S&P financial shares, which tend to benefit from a higher rate environment, declined 0.7 percent.

The Dow Jones industrial average fell 17.73 points, or 0.1 percent, to 18,029.85, the S&P 500 lost 0.66 points, or 0.03 percent, to 2,099.68 and the Nasdaq Composite added 7.10 points, or 0.14 percent, to 4,906.36.

The day’s move breaks a two-session string of record closing highs for the S&P 500.

Investors also weighed developments involving Greece. The European Central Bank agreed a modest increase in emergency funding for Greek banks, putting pressure on Athens to strike a financing deal with its European partners before its lenders run out of money.

Fossil Group Inc shares sank 15.7 percent to $83.69 after the fashion accessory maker reported quarterly earnings and revenue below expectations.

Also on the earnings front, Garmin Ltd fell 10.7 percent to $50.71 after the navigation device maker gave an earnings outlook below estimates.

About 6.0 billion shares changed hands on U.S. exchanges, below the 7.2 billion average for the month so far, according to BATS Global Markets.

Advancing issues outnumbered declining ones on the NYSE by 1,662 to 1,403, for a 1.18-to-1 ratio on the upside; on the Nasdaq, 1,429 issues rose and 1,303 fell for a 1.10-to-1 ratio favoring advancers.

The S&P 500 posted 58 new 52-week highs and two new lows; the Nasdaq Composite recorded 83 new highs and 26 new lows.

Benchmark Currency Rates

USD

1.1401 0.0084 1.5437 1.0616 0.8031 0.7809 0.1289

EUR

0.8771 0.0074 1.3539 0.9312 0.7043 0.6850 0.1131

JPY

118.7300 135.3600 183.2730 126.0360 95.3440 92.7190 15.3009

GBP

0.6478 0.7386 0.0055 0.6877 0.5202 0.5059 0.0835

CHF

0.9420 1.0740 0.0079 1.4542 0.7564 0.7356 0.1214

CAD

1.2452 1.4197 0.0105 1.9222 1.3219 0.9724 0.1605

AUD

1.2805 1.4599 0.0108 1.9767 1.3594 1.0283 0.1651

HKD

7.7585 8.8455 0.0654 11.9765 8.2366 6.2304 6.0584 – 

 

Source: Bloomberg

 


Category: FinanceAsia

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