TOKYO – Asian shares were mostly higher Thursday after signs of progress in Greece’s bailout talks sparked a rally on Wall Street. A benchmark interest rate cut in New Zealand sent that nation’s currency tumbling.
KEEPING SCORE: Japan’s benchmark Nikkei 225 rose 1.4 per cent to 20,335.16 in the morning session. South Korea’s Kospi added 0.3 per cent to 2,058.31 and Hong Kong’s Hang Seng rose 1 per cent to 26,956.97. The Shanghai Composite inched down 0.2 per cent to 5,096.74. Australia’s S&P/ASX 200 climbed 1.3 per cent to 5,549.30.
GREECE DEVELOPMENTS: Bloomberg reported that German Chancellor Angela Merkel may be willing to release more money from Greece’s bailout fund if the Greek government commits to at least one move to tighten its budget. Without a deal by the end of the month, Greece faces the prospect of going bankrupt and dropping the euro.
RATE CUTS: South Korea’s central bank lowered its key interest rate to a historic low of 1.5 per cent, partly because of concerns the outbreak of the deadly MERS virus could slow the economy. New Zealand’s central bank cut its benchmark interest rate by a quarter point to 3.25 per cent as farmers grapple with price drops in milk exports.
THE QUOTE: “With the familiar media blackout ahead of next Thursday’s FOMC, the market is pretty much left to its own device once again. Naturally, they steered towards data-watching,” says Bernard Aw, market strategist at IG in Singapore, referring to a key U.S. Federal Reserve meeting.
CURRENCIES: The U.S. dollar rose to 1.42 New Zealand dollars after the rate cut from 1.40 a day earlier. The euro fell to $1.1302 from $1.1348 in late trading Wednesday. The dollar recovered to 123.11 yen from 122.86 yen, after sliding Wednesday when the Bank of Japan chief signalled the yen probably won’t keep falling.
WALL STREET: The Standard & Poor’s 500 climbed 25.05 points, or 1.2 per cent, to close at 2,105.20 on Wednesday. It was the best day for the broad-market benchmark in a month. The Dow Jones industrial average rallied 236.36 points, or 1.3 per cent, to 18,000.40. The Nasdaq composite gained 62.82 points, or 1.3 per cent, to 5,076.69.
ENERGY: Benchmark U.S. crude was down 34 cents to $61.09 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.29 to close at $61.43 a barrel in Nymex floor trading on Wednesday after after the Energy Department’s weekly supply report showed a surprisingly big drop in crude inventories along with rising demand for gasoline. Brent crude, a benchmark for international oils, fell 18 cents to $66.19.