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Asian markets rise on new Greece bailout

The MSCI Asia Pacific Index was up 0.7% at 138.20 as of 10:55 a.m. in Tokyo. It was headed for its highest close since July 8. About four stocks rose for each that declined.

July 22, 2011 8:45 IST | India Infoline News Service

Asian stock indices were trading mostly higher on Friday, as investors cheered news of Greece finally getting a new official bailout, and a possible deal between President Obama and Republicans on securing a higher debt ceiling.

Global investors have been nervous over the past several days about the seemingly never-ending credit crisis in eurozone and the protracted political logjam over how to cut the swelling US budget deficit.

The MSCI Asia Pacific Index was up 0.7% at 138.20 as of 10:55 a.m. in Tokyo. It was headed for its highest close since July 8. About four stocks rose for each that declined.


The Nikkei 225 average in Japan rose by ~0.9% at 10,096 while the Topix also gained 0.7% to 865. The Shanghai Composite index in China was up 0.3% at 2,774. The Hang Seng in Hong Kong surged 1.7% at 22,370.

The Kospi in South Korea advanced ~0.75% at 2,161. The Taiex in Taiwan was up 0.8% at 8,786. The Straits Times index in Singapore climbed ~1% at 3,169.

The S&P/ASX 200 index in Australia was up 1.1% at 4,607. The NZX 50 in New Zealand was up ~0.7% at 3,444.

European Union members on Thursday agreed to provide 109 billion euros ($156.7 billion) in official support and another 50 billion euros from the private sector, the European Council said in a statement.

The heads of state, including France's Nicolas Sarkozy and Germany's Angela Merkel, also agreed to extend the maturity of future loans for Greece to a maximum 30 years from the current 7.5 years.

The new funds will be provided to Greece at about 3.5%.

EU member nations will also work closely to come up with concrete proposals by October to improve working methods and enhance crisis management in the euro area, the statement said.

As many as 30 non-US firms, including HSBC, Deutsche Bank, Allianz, BNP Paribas and Munich Re agreed to accept a debt exchange of Greek bonds as well as a still-undetermined-sized buyback, according to the Institute of International Finance.

The euro rallied after EU leaders agreed to a new bailout plan for Greece.

Meanwhile, media reports indicate the US President Barack Obama and House Speaker John Boehner are close to reaching a deal on raising the debt ceiling, but both sides refuted reports and said there was no agreement yet.

The dollar rose against most counterparts on speculation that President Obama and Republicans are getting closer on an agreement to cut the US budget deficit.

The yen fell against all of its 16 major counterparts and slid from a four-month high versus the dollar after Japanese Finance Minister Yoshihiko Noda reiterated that he was watching markets closely.

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