Asia markets up on Greece hopes, ECB easing hits euro

HONG KONG - Asian markets rose for a third straight day Wednesday, with Tokyo hitting a more than 18-year high, on confidence Greece will finally hammer out a bailout reform deal with creditors and avert a default.

With expectations high that a last-minute agreement will be reached, the euro resumed its downward spiral against the dollar as traders turned their attention to a possible US rate rise and European monetary easing.

Tokyo climbed 0.28 per cent, or 58.61 points, to 20,868.03, its best finish since December 1996.

Shanghai piled on 2,48 per cent, or 113.66 points, to 4,690.15 -- extending Tuesday's 2.19 per cent gain -- after plunging more than 13 per cent last week. Analysts said the market is benefiting from the release of cash that had been tied up for a recent batch of initial public offerings.

Hong Kong advanced 0.26 per cent, or 71.51 points, to 27,404.97.

Sydney was flat, adding 2.5 points to close at 5,686.8, and Seoul was 0.21 per cent, or 4.33 points, higher at 2,085.53.

Global equity markets are on a roll this week after Greece at the weekend submitted bailout proposals that were welcomed by creditors.

Eurozone finance ministers will meet Wednesday to work on details of the new plan, before a full European Union summit is held the day after.

However, Greece's leaders -- elected on an anti-austerity platform -- cautioned they had to get any agreement through parliament, with some members of the ruling party claiming red lines on some issues such as tax had been crossed.

Greece must unlock billions of euros in aid before a June 30 deadline to repay an International Monetary Fund debt. It if fails it will default, with some warnings it could be ejected from the EU.

'Foregone conclusion' 

Markets appear to have taken the view that an agreement in Greece "is a foregone conclusion," Ric Spooner, chief market analyst in Sydney at CMC Markets, told Bloomberg News.

"Markets have now focused back on what they were focusing on prior to real concerns developing about Greece, and that is the adjustment for the potential for higher interest rates."

On Wall Street Tuesday the Dow added 0.13 per cent and the S&P 500 nudged up 0.06 per cent. The Nasdaq put on 0.12 per cent to end at another record for a second day in a row.

And in Europe, Athens rose more than six per cent, adding to a nine per cent gain Monday.

There were also advances in Paris, Frankfurt, London, Lisbon, Rome and Madrid.

The euro was under pressure as investors' confidence in an eventual Greek debt deal allowed the focus to shift to the prospects of higher US interest rates ahead.

The euro bought $1.1204 and 138.90 yen compared with $1.1168 and 138.36 yen in New York, but was well down from $1.1396 and 139.87 yen at the start of the week.

The dollar was at 123.98 yen against 123.89 yen.

"Markets are pretty content with the idea that Greece and its creditors will do a deal before the June 30 deadline" on repaying massive debts, said Emma Lawson, senior currency strategist at National Australia Bank.

Oil prices rose on expectations of a decline in US crude inventories. US benchmark West Texas Intermediate for August delivery was up 15 cents at $61.16 a barrel and Brent climbed 14 cents to $64.59 in afternoon trade.

Gold fetched $1,175.95 compared with $1,183.00 late Monday.

In other markets:

- Taipei was flat, edging up 6.17 points to 9,397.31.

Taiwan Semiconductor Manufacturing Co closed 0.35 per cent higher at Tw$145.0 while Hon Hai Precision Industry added 0.51 per cent to Tw$97.6.

- Wellington ended marginally higher, adding 3.35 points to 5,775.48.

Air New Zealand was up 0.99 per cent at NZ$2.55 and Spark was unchanged at NZ$2.79.

- Manila closed 1.21 per cent, or 91.77 points, higher at 7,643.33.

Ayala Land was up 0.4 per cent at 38 pesos, Philippine Long Distance Telephone gained 2.49 per cent to 2,880 pesos and Metrobank jumped 2.14 per cent to 92.95 pesos.

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