Asian markets made tentative gains early Monday as investors
waited to see the outcome of Greece's negotiations with creditors
over its debt situation.
Most markets in the region edged higher—the Nikkei Stock Average
was up 0.8%, Singapore's Strait Times rose 0.7% and the Hang Seng
Index rose 0.3%. Australia's S&P ASX 200 fell 0.4%, led down by
large banks like Commonwealth Bank of Australia and National
Australia Bank Ltd., which dropped nearly 1.5% each.
China's mainland market was closed Monday for a national
holiday. Shanghai stocks fell 13% last week, their worst weekly
selloff since the global financial crisis.
European leaders are meeting in an emergency summit on Monday to
discuss Greece. The euro is expected to slump if Athens fails to
reach an agreement with creditors, which could lead to buying of
safe-haven assets like the Swiss franc and the Japanese yen. The
Japanese yen was at 122.68 against the U.S. dollar, strengthening
from 122.70 late Friday in New York.
Markets are likely to remain in a holding pattern over the next
few days as investors watch developments in Greece. Tim Condon, an
economist with ING in Singapore, noted the outcome is still
uncertain, putting pressure on Asian equities in particular. "I
think we'll go down to the wire one this," Mr. Condon said.
The International Monetary Fund and eurozone governments have
been keeping Greece afloat with emergency loans for the past five
years, but Greece needs urgent financial help to avoid it
defaulting on a loan repayment to the IMF on June 30.
For now, the euro has remained robust against the dollar, in
large part because of indications from the U.S. Federal Reserve
that it will move slowly raising interest rates. The yen gained
0.6% last week against the dollar, also given expectations the U.S.
won't raise rates aggressively, making other assets more attractive
by comparison.
Write to Chao Deng at Chao.Deng@wsj.com
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