Asia stocks lifted by Greece deal, China's 4th day of gains

AP News
Posted: Jul 13, 2015 11:42 PM
Asia stocks lifted by Greece deal, China's 4th day of gains

BEIJING (AP) — Asian stock markets were mostly higher Tuesday after Greece and its European creditors agreed on a bailout and Chinese shares rose for a fourth day following a massive government intervention.

KEEPING SCORE: Tokyo's Nikkei 225 rose 1.4 percent to 20,379.67 and the Shanghai Composite Index was up 0.6 percent at 3,994.58. Sydney's S&P/ASX 200 added 1.7 percent to 5,565.20 and New Zealand, Taiwan, Singapore, Manila and Jakarta also rose. Hong Kong's Hang Send was down 0.7 percent at 25,045.75. Seoul's Kospi was little changed at 2,062.71.

GREECE RESPITE: Greece struck a preliminary rescue deal with other European Union governments that should avert an imminent financial catastrophe but guarantees years more hardship for its people. The agreement removes the immediate threat Greece would default on its debts and leave the euro. But in exchange for a three-year loan program, the Greek prime minister has to persuade skeptical legislators to pass tax increases and other key demands into law by Wednesday. Major markets in Europe rallied. Germany's DAX climbed 1.5 percent on Monday and France's CAC 40 surged 1.9 percent. Britain's FTSE 100 finished up 1 percent.

ANALYST'S TAKE: "Whether Greece has walked the plank to an economic and political collapse is still unknown," said Bernard Aw of IG Markets in a report. "While the agreement is definitely very positive for market sentiments, as the prospects of Grexit have significantly reduced, this does not mean the odds are eliminated in the medium term. Firstly, Greek lawmakers still need to pass the measures agreed upon into legislation. Secondly, political instability may surface if Tsipras loses his majority and a unity government is required. We would see a difficult road ahead. For now, calmer waters."

CHINA'S REBOUND: The main Chinese market index has risen for four trading sessions following frantic government efforts to halt a slide that saw it tumble 30 percent over the past month. The Shanghai Composite Index still is down more than 20 percent from its June 12 peak. Drastic official measures included a ban on short sales and stock sales by corporate executives and major shareholders and a pledge by state-owned brokerages and government pension funds to buy shares. Hundreds of companies have suspended trading in their shares. Analysts say it still is unclear whether the market can hold up once temporary barriers to selling are relaxed.

WALL STREET: With anxiety about Greece temporarily abated, investors are likely to shift attention to earnings reports. JPMorgan Chase, Johnson & Johnson and Wells Fargo are due to report Tuesday, followed by Bank of America and Google later in the week. Analysts expect overall earnings to fall 4.5 percent compared with the prior year, according to S&P Capital IQ. That would be the first drop in earnings since 2009. On Monday, the S&P 500 gained 1.1 percent to 2,099.60. The Dow Jones industrial average climbed 1.2 percent to 17,977.68 and the Nasdaq gained 1.5 percent to 5,071.51.

ENERGY: Benchmark U.S. crude shed 54 cents to $51.66 per barrel in electronic trading on the New York Mercantile Exchange. The contract lost 54 cents on Monday to close at $52.20. Brent crude, used to price international oils, declined 34 cents to $57.81 in London after losing 85 cents the previous session to $58.15.

CURRENCIES: The dollar declined to 123.47 yen from Monday's 123.54 yen. The euro edged up to $1.1010 from the previous session's $1.1003.