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World stocks rise after Greece austerity vote

Monday, 13 February 2012 | 12:54
World stock markets rose Monday after Greece's parliament approved a new set of austerity measures that were required by international lenders in exchange for an emergency bailout.
Benchmark crude climbed above $99 per barrel while the dollar fell against the euro but gained against the yen.
European stock markets advanced in early trading. Britain's FTSE 100 rose 0.8 percent to 5,896.01. Germany's DAX added 0.6 percent to 6,731.32 and France's CAC-40 gained 0.7 percent. Wall Street also appeared headed for a higher opening, with Dow Jones industrial futures up 0.5 percent to 12,834 and S&P 500 futures gaining 0.6 percent to 1,348.60.
Earlier in the day, Asian stocks chalked up gains after Greece took a crucial step toward fixing its debt crisis.
Japan's Nikkei 225 index jumped 0.6 percent to close at 8,999.18. Hong Kong's Hang Seng gained 0.5 percent to 20,887.40 and South Korea's Kospi added 0.6 percent to 2,005.74.
In mainland China, the benchmark Shanghai Composite Index ended virtually unchanged at 2,351.86 while the Shenzhen Composite Index gained 1 percent to 912.31. Benchmarks in Taiwan, Singapore and Indonesia also rose.
Drastic cuts in civil service jobs, minimum wages and pensions were among the measures approved by lawmakers in Greece in order to collect a second, urgently needed rescue loan for the country.
Without the $170 billion (€130 billion) financial lifeline, Greece will default on a mountain of national debt next month and likely be pressed into a disruptive exit from the euro common currency.
Investors in Asia greeted the Greek vote with relief. But Greeks, who have been struggling to cope with a 20 percent unemployment rate and five years of recession, took to the streets to protest the measures. Riots and fires continued all weekend.
Attention now shifts to a meeting Wednesday of European finance ministers, who will discuss additional bailout funds for Greece.
Analysts at Credit Agricole CIB in Hong Kong said in an email that the parliament vote "did not come without major cost in the form of escalating protests and violence within Greece."
"At least for today the market tone will be a positive one as attention shifts to a meeting of EU finance ministers on Wednesday."
Elsewhere, Chinese property shares plummeted after the city of Wuhu in eastern China, announced it was suspending plans it announced last week to subsidize some home purchases and give tax breaks to help support the local market.
That news, suggesting an easing of curbs on the real estate market, pushed property and related shares higher late last week.
"I think that shows you the central government is keen to make sure restrictions on property remain in place, and there won't be any easing," said Andrew Sullivan, principal sales trader at Piper Jaffray in Hong Kong.
Hong Kong-listed Evergrande Real Estate Group Ltd. slid 6.9 percent, while China Resources Land Ltd. lost 5.8 percent. Real estate-related financial and construction materials companies also fell.
State-run newspapers carried prominent coverage Monday of comments by Premier Wen Jiabao reaffirming the central government's determination to keep curbs on the real estate market to prevent a resurgence of the property speculation that helped drive prices to levels unaffordable for most Chinese families.
Financial shares were boosted by hopes that Greece would avoid a default on its debt, an event that could spark havoc among banks in Europe and beyond.
Benchmark crude for March delivery was up 94 cents at $99.61 in electronic trading on the New York Mercantile Exchange. The contract fell $1.17 to settle at $98.67 on the Nymex on Friday.
In currency trading, the euro jumped to $1.3273 from $1.3170 late Friday in New York. The dollar rose to 77.67 yen from 77.60 yen.
Source: Associated Press
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