Monday, 13 July 2015 12:35
HONG KONG: Asian markets rose Monday while the euro held its own as European leaders struggled to hammer out a debt reform deal to keep Greece in the eurozone, with a source saying a compromise had finally been found.
Shanghai continued its recovery from weeks of wild volatility as several firms returned to trading while China released mixed data showing a pick-up in export growth but two-way trade sinking in the first half of the year.
Tokyo rose 1.57 percent, or 309.94 points, to 20,089.77 and Seoul jumped 1.49 percent, or 30.25 points, to 2,061.52. Taipei put on 1.34 percent, or 119.79 points, to 9,033.92.
In late trade Shanghai rallied more than three percent and Hong Kong added 0.26 percent.
However, Sydney gave back early gains to end 0.34 percent, or 18.8 points, down at 5,473.2 and Wellington shed 0.33 percent, or 18.64 points, to 5,706.70.
Germany and other eurozone leaders handed Greece a brutal ultimatum for desperately needed bailout cash Sunday, with Chancellor Angela Merkel pushing for a temporary euro exit — or “time out” — if it does not agree.
A European source told AFP that Greek Prime Minister Alexis Tsipras, German Chancellor Angela Merkel, French President Francois Hollande and EU president Donald Tusk hammered out the proposal on the sidelines of an emergency summit of the 19 eurozone countries.
“There is a four-way deal which will now be put to the 19,” said the source, who spoke on condition of anonymity.
Tusk’s spokesman Preben Aamann said on Twitter that the EU leader had reconvened the full summit after a break of several hours “with (a) compromise proposal”, but gave no further details.
However, a Greek official said there were still issues to be resolved.
Athens had earlier said the proposals put forward by Merkel Sunday were “very bad”, but with its lenders on the brink it looked to have little choice but to bow to reform demands.
In Japanese trade the euro dipped but managed to stave off heavy losses as the talks continued in Brussels.
It eased to $ 1.1142 from $ 1.1149 in New York late Friday. In earlier electronic trading, the single currency fell as low as $ 1.1089. It was also at 136.60 yen compared with 136.58 yen in US trade.
“Market reaction in the euro is surprisingly muted,” said Steven Englander, global head of Group-of-10 currency strategy at Citigroup.
“The absence of agreement and toughness of terms are eye-catching, but investors are waiting for the outcome more than trying to anticipate it.”
– Shanghai recovery –
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Shanghai extended a rebound at the end of last week that came after weeks of extreme volatility, with investors settled by government moves last week to prevent a market crash.
While Greece’s future in the eurozone hangs in the balance, attention is also on China.
China’s stock market rose in the previous two sessions but dealers remain nervous after a month of massive selling that has seen the Shanghai Composite index fall about 30 percent, wiping trillions of dollars off valuations.
About 400 firms began trading again Monday in Shanghai after almost half the market was suspended last week to prevent a further meltdown.
Investors welcomed an upbeat trade report that showed exports increased more than expected in June.
“Imports improved significantly in June because of lower import duties,” said Liu Xuezhi, an economist with Bank of Communications Co. in Shanghai, told Bloomberg News. “Exports are expected to maintain modest growth in coming months to help the economy.”
However, Monday’s figures also showed two-way trade sank almost seven percent in the first half of the year, well off the government’s target of growth of “about 6.0 percent” for all of 2015.
Despite the uptick in Shanghai, Sam Tuck, a senior currency strategist in Auckland at ANZ Bank New Zealand Ltd., warned: “It’s positive that the authorities didn’t feel the need to do anything over the weekend but markets are still clearly nervous and we need to see most of the stock market open.
“There’s still lots of halts.”
The sell-off spread to other regional markets on fears for the world’s number two economy and key driver of global growth.
On oil markets, US benchmark West Texas Intermediate for delivery in August fell 1.39 to $ 51.35 and Brent dropped $ 1.80 to $ 56.93.
Gold fetched $ 1,159.98 compared with $ 1,163.50 late Friday.
