Asian markets opened flat Tuesday with investors in wait-and-see
mode after Greece's imposition of capital controls unsettled
markets globally, as the country looks set to default on $1.73
billion loan to the International Monetary Fund.
The effects of a market rout in the U.S., with the S&P 500
sinking 2.1%, seem to have abated as Asia started trading Tuesday.
The euro recovered slightly from a selloff on Monday, rising 0.1%
to 1.1203 against the dollar. Still, it fell 0.3% against the
Japanese yen in early Asian trade as investors seek safer
assets.
The market appears "to be placing its faith in the [European
Central Bank] to 'do whatever it takes' to protect the euro,
whatever the outcome in Greece," says BNZ foreign-exchange
strategist Kymberly Martin.
The Nikkei 225 Stock Average rose 0.1% in early trading while
the S&P/ASX 200 index slipped 0.1%.
Investors are watching to see whether China's stock market will
continue its slide at the open Tuesday. The Shanghai Composite
Index has fallen more than 20% from a recent high, denoting a bear
market. Authorities have tried to draw a line under the declines.
The central bank cut interest rates over the weekend and late
Monday the Finance Ministry announced that the state's pension fund
could be allowed to invest up to 30% of its net asset value in
securities.
South Korea's Kospi Composite was flat after industrial
production data, retail sales and business confidence indicators
all missed estimates, prompting bets for further stimulus from the
Bank of Korea.
"The MERS outbreak knocked down consumer confidence and put a
halt on retail and tourism spending," Frederic Neumann, co-head of
Asian economic research, wrote in a research report. "But something
broader is happening: the industrial sector isn't bouncing back as
expected, with weak overseas demand partly to blame."
Rebecca Howard contributed to this article.
Write to Gregor Stuart Hunter at gregor.hunter@wsj.com
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