Asian shares riding high on Greek vote hopes

HONG KONG, (AFP) - Asian stock markets rose Wednesday on hopes Greek lawmakers will pass a crucial vote that will help the country avoid a devastating default.

As global markets and politicians were confident tough austerity measures would pass through parliament, Athens was gripped by a second day of violence, with police again firing teargas on thousands protesting against the cuts.

Japanese shares moved into in positive territory after figures showed post-quake industrial output had surged to its second highest level on record while exporters were boosted by a weaker yen.

Tokyo jumped 1.54 percent, or 148.28 points, to 9,797.26 and Seoul closed 1.53 percent, or 31.51 points, higher at 2,094.42, while Hong Kong gained 0.39 percent in the afternoon. Sydney rose 1.23 percent, or 55.2 points, to 4,529.5.

But Shanghai focused instead on renewed fears that China’s leaders may hike interest rates as they try to dampen soaring inflation. The market was 0.41 percent lower in the afternoon.

Asian traders were following a robust performance on Wall Street, where the three main indexes all rose more than one percent on Tuesday.

The Dow Jones Industrial Average added 1.21 percent to close at 12,188.69 while the broader S&P 500 jumped 1.29 percent and the tech-heavy Nasdaq Composite climbed 1.53 percent.





“The market has shaken off the pessimistic mood starting from last week,” Kazuhiro Takahashi, general manager of investment strategy and research at Daiwa Securities told Dow Jones Newswires.

“So we’re watching to see if this trend will continue,” he said.

Investors welcomed reports that progress was being made in talks to prevent a Greek default, in part by rolling over a large portion of Greece’s debt into 30-year bonds.

Lawmakers in Athens are expected to vote later Wednesday on austerity measures demanded by international creditors in exchange for the money Greece needs to avoid default.

Approval would unblock 12 billion euros ($17 billion) of emergency loans from last year’s 110-billion-euro bailout.

That would then free eurozone finance ministers to start drawing up a second bailout for perhaps as much again, at talks in Brussels on Sunday.

But the $41 billion package of tax grabs, spending cuts and sell-offs have led unions to mobilise members for a 48-hour general strike that saw around 10,000 people massing outside parliament on Tuesday and again on Wednesday.

The strike Tuesday brought about a blanket power cut and transport came to a standstill in the Greek capital.

Police said 21 officers were hurt but only a dozen or so arrests were made despite firebombs setting property ablaze and protesters smashing up the marble steps of a luxury hotel facing the legislature, to use as missiles.

However, EU president Herman Van Rompuy called on Greece’s parliament -- where Prime Minister George Papandreou has a five-seat majority -- to take a decision “crucial for the Greek people, but also for the eurozone and the stability of the world economy.”After being named the new head of the International Monetary Fund, France’s Christine Lagarde immediately urged the Greek opposition “to join in national unity.””The country’s destiny is at stake,” she said in a French television interview. “I think that at this moment they need to put aside their major political differences.”In Tokyo the mood was also helped by figures showing Japan’s industrial production jumped 5.7 percent in May from the previous month, reflecting a steady recovery in supply chains following the March 11 quake and tsunami.

The level, the second highest rise on record, beat market expectations of a 5.5-percent increase and followed a revised 1.6-percent monthly lift in April.

The euro benefited from expectations of success in the Greek vote, with the single currency fetching $1.4372 from $1.4367 late Tuesday in New York while it was virtually flat at 116.43 yen against 116.47.

The dollar was at 81.01 yen, slightly down from 81.08 late Tuesday in New York, although the yen is down from recent highs as traders shift to more risky assets.

Oil was mixed in Asian afternoon trade, with New York’s main contract, West Texas Intermediate for delivery in August, down six cents to $92.83 a barrel after rising $2.28 on Tuesday.

Brent North Sea crude also for August climbed one cent to $108.79 after leaping $2.79 the day before.

Gold opened at $1,503.00-$1,504.00 an ounce in Hong Kong, slightly up from its Monday close of $1,502.00-$1,503.00.

In other markets:

-- Taipei ended 1.11 percent, or 94.52 percent, higher at 8,573.38.

TSMC rose 2.73 percent to Tw$71.4 while China Steel was up 1.49 percent at Tw$34.0.

-- Manila closed 0.95 percent, or 40.64 points, lower at 4,249.35.

Philex Mining ended 0.2 percent higher at 22.50 pesos and SM Investments gained 0.7 percent to 530.50 pesos.

Philippine Long Distance Telephone shed 3.2 percent to 2,324 pesos. But SM

-- Wellington fell 0.76 percent, or 26.09 points, to 3,414.92.

Fletcher Building fell 1.2 percent to NZ$