Greek debt plan boosts euro, most Asian shares

Haveeru Daily
Apr 12, 2010 - 12:00

HONG KONG, April 12, 2010 (AFP) - The euro surged Monday after eurozone countries unveiled a massive package to support debt-laden Greece, giving a boost to most Asian shares.

Investors were given the ideal start to the week after finance ministers from the 16 countries that share the European currency agreed a three-year 30-billion-euro (41-billion-dollar) plan to provide financial aid.

The euro was at 1.3622 dollars in early London trade, up from 1.3497 dollars in New York late on Friday and gained to 127.18 yen from 125.51 yen on Friday. The US dollar fetched 93.28 yen, up from 93.18 Friday.

The decision to announce the lifeline, which will see Greece repay the loans at five percent interest, was aimed at soothing markets that have dragged down the euro and forced up Athens' bond yields to 12-year highs.

"The euro is firmer as traders took heart from the Sunday announcement of the aid package for Greece," said Daisuke Karakama, forex analyst at Mizuho Corporate Bank.

The IMF's role in the package will be discussed on Monday and will include what measures the troubled country would be required to take in order to get the cash.

The package is intended as a back-up plan in case Greece is no longer able to raise funds to repay its debts and finance its budget on financial markets because of excessively high interest rates.

However, "the initiative for activating the rescue package rests with the Greek government and we’d be surprised if they didn’t use it in the absence of a sharp fall in borrowing costs," said NAB Capital strategist John Kyriakopoulos.

Asian dealers welcomed the move, with Tokyo closing up 0.42 percent, or 47.56 points, at 11,251.90 as exports rallied on the weaker yen.

Sydney gained 0.73 percent, to close 36.2 points higher at 4,984.3. It had earlier in the day pushed above 5,000 points for the first time in more than a year.

"One factor limiting gains in the Tokyo market is gone. Investors are chasing the market higher," Masumi Yamamoto, market analyst at Daiwa Securities Capital Markets in Tokyo told Dow Jones Newswires.

Global shares have been on an upward trend since last month.

Wall Street ended at an 18-month high as dealers awaited the start of the company earnings season. It had broken the 11,000 barrier -- for the first time since September 29, 2008 -- just before the closing bell.

However, in Hong Kong profit-takers made a move towards the end of trading, leaving the Hang Seng Index 0.32 percent, or 70.33 points, lower at 22,138.17.

In Hong Kong Russian metals giant UC Rusal said it swung back into the black in 2009 following a debt restructuring, reporting a net profit of 821 million US dollars. It reported a net loss of 5.98 billion US dollars in 2008.

Shares in Rusal, the first Russian company to list in the Chinese financial hub, traded as high as 9.75 Hong Kong dollars on Monday after closing on Friday at 9.40 Hong Kong dollars.

Shanghai fell 0.51 percent, or 16.04 points, to 3,129.26. Property developers were weighed by lingering concerns Beijing may introduce further tightening measures to rein in rising real estate prices.

Bangkok was 4.8 percent lower in late afternoon trade as fears grew that the country faces further political turmoil after its worst political unrest in almost two decades.

Thailand's "anti-government" Red Shirts vowed to press on with their bid to overthrow the government following clashes that left 21 people dead.

Oil was higher, with New York's main contract, light sweet crude for May delivery up 34 cents to 85.26 dollars a barrel and Brent North Sea crude for May delivery advancing 41 cents to 85.24 dollars.

Gold ended higher at 1,164.50-1,165.50 US dollars an ounce in Hong Kong, up from Friday's close of 1,155.00-1,156.00 dollars.

In other markets:

-- Singapore closed up 0.17 percent, or 5.20 points, at 2,977.17.

DBS Group Holdings was up 1.77 percent to 14.94 Singapore dollars and Singapore Airlines dropped 0.90 percent to 15.46 Singapore dollars while ST Engineering fell 1.21 percent to 3.28 Singapore dollars,

-- Seoul closed 0.82 percent, or 14.17 points, lower at 1,710.30.

Dealers ignored news that the central bank had raised its 2010 growth forecast to 5.2 percent, which would be the fastest in four years.

Its previous estimate in December was 4.6 percent.

-- Taipei closed up 0.32 percent, or 25.72 points, at 8,117.75.

Taiwan Semiconductor Manufacturing Co gained 0.64 percent to 63.10 Taiwan dollars, while rival Microelectronics Corp closed unchanged at 16.95.

-- Jakarta gained 1.28 percent, or 36.32 points, to 2,881.33.

Bank Rakyat rose 6.1 percent to 8,600 rupiah, Bank Mandiri increased 5.0 percent to 5,300 while car maker Astra International jumped 2.5 percent to 44,550.

Coal miner Bumi Resources fell 4.0 percent to 2,400 rupiah.

-- Kuala Lumpur ended 0.42 percent, or 5.63 points, higher at 1,339.61.

Communications company Measat gained 18.7 percent to 3.69 ringgit, carmaker Tan Chong added 10.2 percent to 4.99 while Hong Leong Bank lost 1.4 percent to 8.67.

-- Manila closed 1.19 percent, or 38.71 points, up at 3,294.83.

The index is at its highest level since February 4, 2008.

Ayala Corp rose 1.4 percent to 352.50 pesos, Philippine Long Distance Telephone added 1.8 percent to 2,535 and Energy Development rose 4 percent to 5.20.

-- Wellington ended 0.12 percent higher, adding 3.89 points to 3,314.14.

New Zealand Oil & Gas closed up 0.6 percent at 1.63 New Zealand dollars, while Restaurant Brands, which operates KFC, Pizza Hut and Starbucks in the country, closed up 1.4 percent at 2.18.

Telecom fell a cent to 2.20 dollars after saying wholesale and international chief executive Matt Crockett would leave the company at the end of June.

-- Bangkok fell 3.64 percent, or 28.76 points, to close at 760.90 after bloody clashes which killed 21 people and injured more than 800 during weekend.

Banpu plaunged 22.00 baht at 598.00 and PTT Plc fell 13.00 baht to close at 256.00 baht.

-- Mumbai fell 0.45 percent, or 80.14 points, to at 17,853.00.

On Monday, India's Industrial output saw double-digit growth for a sixth straight month in February, adding pressure on the central bank to further hike interest rates to control inflation.

The Reserve Bank of India will meet on monetary policy on April 20.

India's largest vehicle maker Tata Motors fell 3.24 percent to 782.65 rupees while the software giant Infosys Technologies edged up 0.16 percent to 2,683.25.

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