Asia: Stocks mostly higher after Wall Street rally

[HONG KONG] Asian markets mostly rallied Thursday following a strong close on Wall Street and hopes for a Greek debt deal, while the dollar recovered after the previous day's sharp losses.

Tokyo rallied 1.44 per cent by lunch, Hong Kong jumped 0.94 per cent, Sydney gained 1.23 per cent and Seoul put on 0.23 per cent while Shanghai was 0.58 per cent lower.

The three main indexes in New York enjoyed one of their best days for weeks, snapping a four-day sell-off, thanks to a surge in banks and technology stocks as well as optimism over the Greek debt crisis.

Dealers welcomed news that German Chancellor Angela Merkel and French President Francois Hollande would meet with Greek Prime Minister Alexis Tsipras on the sidelines of an EU-Latin America summit, encouraging hopes for a deal extending Greece's bailout funding.

The Dow jumped 1.33 per cent, the S&P 500 rose 1.20 per cent and the Nasdaq gained 1.25 per cent.

Later in the day the three European leaders said they had agreed to work harder for a deal that will unlock billions of euros much needed by Athens to service its debts and avert a default that could see it tumble out of the eurozone.

"We decided to intensify efforts to resolve the differences that remain and to move towards a solution," radical leftist leader Tsipras told reporters after the three-way meeting broke up without a deal.

However, analysts said traders remain nervous.

"We're coming to a stage where a decision has to be made on Greece," Matthew Sherwood, head of investment markets research at Perpetual Ltd, told Bloomberg News.

"Markets are on edge, hoping that some stop gap measure could be agreed. We could see a continued selloff in equities if Greece defaults." On currency markets, the euro was US$1.1305 and 138.94 yen early Thursday against US$1.1324 and 138.92 yen in New York.

The dollar rebounded against the yen after taking a hit Wednesday in reaction to comments from Japan's central bank chief that the country's currency was "unlikely" to slide further. The comments saw the dollar fall to 122.70 yen from 124.50 yen.

However, the greenback edged up to 123.04 yen in Tokyo Thursday morning from 122.67 yen in US trade.

Oil prices fell after a mixed US inventory report that showed a large dip in crude reserves but record-high production. US benchmark West Texas Intermediate for July delivery fell 35 cents to US$61.08 while Brent crude for July eased 29 cents to US$65.41.

Gold fetched US$1,186.34 compared with US$1,188.80 late Wednesday.


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