Asia: Stocks follow Wall Street higher

[HONG KONG] Asian markets followed a positive lead from Wall Street on Tuesday, with investors keeping an eye on Europe as Greece struggles to pay off its debts.

Tokyo rose 0.79 per cent, Hong Kong added 1.14 per cent, Sydney gained 0.93 per cent and Shanghai was up 0.72 per cent, while Seoul was flat.

The gains reversed some of the losses suffered on Monday that came on fears about Greece's future in the eurozone as Athens looks to secure billions of euros in bailout cash to pay its enormous debts.

With its creditors refusing to extend a repayment deadline while also haggling over its bailout reforms, the Greek government has ordered all public agencies to hand over their financial reserves.

"With this act, the government hopes to cover urgent needs of the state amounting to three billion euros for the next 15 days," said a decree, which still needs adoption by the parliament.

However, the euro held its ground in foreign exchange markets. The single currency bought US$1.0733 and 128.20 yen against US$1.0741 and 128.05 yen on Wall Street.

Hong Kong and Shanghai resumed their upward trend after sharp losses Monday that came after China's stock market regulator tightened rules on trading with borrowed money and increase the supply of shares for short-selling.

Confidence was buoyed by Sunday's cut by the People's Bank of China in the amount of cash lenders must hold in reserve, the move aimed at helping kick-start the economy, which grew in January-March at its slowest quarterly pace in six years. The next indicator on the state of China's economy comes with HSBC's preliminary index of manufacturing activity on Thursday.

US traders welcomed that move. The Dow jumped 1.17 per cent, the S&P 500 rose 0.92 per cent and the Nasdaq rallied 1.27 per cent.

The dollar edged up despite a key Federal Reserve official suggesting a US rate hike could be put back.

New York Fed President William Dudley said recent inflation data was not strong enough to warrant an increase, even though economics growth was healthy.

The dollar was at 119.34 yen against 119.22 yen, and sharply higher than 118.62 yen in Tokyo earlier Monday.

Oil prices retreated. US benchmark West Texas Intermediate for May delivery fell 15 cents to US$56.23 while Brent crude for June dipped 15 cents to US$63.30.

Gold fetched $US1,194.55 against US$1,200.30 late Monday.

AFP