Wednesday, June 29, 2011

ASIA-Shares to rise on optimism ahead of Greek vote

WELLINGTON: Asian stocks will likely rise on Wednesday, as global markets become increasingly confident the Greek parliament will pass harsh austerity measures and save the euro zone member from a debt default.

Market sentiment is still fragile, however, as protests on the streets of Athens turned violent, with the European Union warning there are no other options to solve Greece's problems.

Growth sensitive assets such as commodities and stocks rose, with the 19-commodity Reuters-Jefferies CRB index up 1.7 percent, its biggest advance in six weeks, helped by a jump in oil prices.

The main Wall Street indices gained for a second day, up between 1.2 percent and 1.5 percent, as investors bought up stocks that had suffered in the recent sell off ahead of the quarter-end on Thursday.

Asian stocks listed on Wall Street rose 1.17 percent while world stocks, as measured by the MSCI world equity index, gained 1.09 percent, and the Thomson Reuters global stock index was 0.81 percent higher.

British shares rose 0.8 percent while European shares gained 0.6 percent as hopes of a solution for Greece saw investors buy back into sectors such as banks.

The euro rose against U.S. dollar on confidence about Greece and tough talk on inflation from ECB President Jean-Claude Trichet, raising expectations rates will rise in the euro zone next month.

Japanese markets are set to gain on a weaker yen, however technical resistance around 9,700 may prove a tough barrier to overcome. Nikkei futures traded in Chicago were 135 points above the last closing level in Osaka.

Australian stocks will probably also start stronger, with share price index futures up 1.2 percent to 4,522, a 47.7 point premium to the close of the underlying S&P/ASX 200 index. ' Reuters

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