Asia: Markets mostly up on Greece hopes

[HONG KONG] Asian markets mostly rose Monday after Greece presented to its creditors new proposals on reforming its bailout, fuelling hopes of an end to a five-month deadlock, averting a default and possible exit from the eurozone.

The euro also advanced after Brussels said it had received the plans a day before a emergency European summit Monday, with Greek Prime Minister Alexis Tsipras' office calling it a "mutually beneficial deal".

Tokyo added 0.83 percent, Hong Kong gained 0.54 per cent, Seoul was 0.40 per cent higher, Singapore put on 0.63 per cent and Taipei rallied 1.28 per cent. Sydney fell 0.40 per cent, however.

Shanghai was closed for a public holiday.

While it is not clear what concessions have been offered by either side, Martin Selmayr, the head of European Commission President Jean-Claude Juncker's cabinet, said the Athens proposal offered "a good basis for progress".

However, he underscored the tumult surrounding the deal by describing the negotiations as a "forceps delivery".

The plans were submitted after Tsipras held talks with German Chancellor Angela Merkel, French President Francois Hollande and Juncker.

Analysts said the move was cheered in Asian trading rooms. "Originally there wasn't going to be one, so the fact that there's a new proposal on the table appears to be seen favourably," Shoji Hirakawa, chief equity strategist at Okasan Securities Co. in Tokyo, told Bloomberg News.

The euro strengthened, buying US$1.1362 and 139.55 yen, compared with US$1.1349 and 139.23 yen in New York late Friday. The dollar was at 122.65 yen against 122.69 yen in US trade.

The heads of the 19 eurozone countries will hold an emergency summit in Brussels later Monday under pressure to prevent Greece from defaulting on its debt.

If the two sides are unable to agree a deal, Greece will likely default on an IMF debt payment of around 1.5 billion euros due on June 30, leading to the possibility of it crashing out of the eurozone.

Greece said its new proposals were aimed at reaching a "definitive solution" to end the standoff between Athens and its creditors.

"It is difficult to forecast how the summit will turn out but it seems there is no small deal of optimism in markets that they will come to an agreement in the end," Shinya Harui, a Europe-focused financial markets analyst at Nomura Securities in Tokyo, told AFP.

The European Central Bank will also meet to discuss whether to raise the level of emergency funding to Greek lenders again, as the country's banking system faces a run by customers withdrawing their cash.

Oil prices slipped. US benchmark West Texas Intermediate for July delivery fell 15 cents to US$59.46 while Brent crude for August eased 19 cents to $62.83.

Gold fetched US$1,199.78 compared with US$1,202.66 late Friday.

AFP