Asian markets rally as Greek bailout nears

Asian markets rallied on Friday at the end of a tough week, with sentiment boosted by hopes that a bailout for debt-laden Greece is in sight.

The news also lifted the euro from its one-year lows, sending the yen down to the benefit of Japanese exporters.

Greek Prime Minister George Papandreou, warning that Greece was in “a battle for survival”, said it would complete talks on getting tens of billions of euros from the European Union and International Monetary Fund “in coming days”.

“We will do whatever it takes to save the country,” he said.

Tokyo’s Nikkei rose 1.21 percent, or 132.61 points, to 11,057.40 and Hong Kong added 1.59 percent, or 329.67 points to end at 21,108.59.

European Commission President Jose Manuel Barroso on Friday also said a deal was imminent and moved to allay fears the crisis would spiral out of control, saying Athens would “take all measures necessary” to get its affairs in order.

“I’m confident that the talks will be concluded soon, meaning in the next days,” he said, adding: “I’m confident our actions will prevent further possible effects of the contagion.” The EU and Greek authorities are making “solid and rapid progress”, he said. Asian investors followed a rally on Wall Street, where the Dow rose 1.10 percent on the news out of Europe.

Athens has called on the EU and IMF to activate a three-year rescue package worth 45 billion euros this year as it faces a May 19 deadline to repay nine billion euros in old debts. The total cost of the bailout could reach 120 billion euros.

If it misses this date the country will default, which would have a devastating effect on the economy and could ripple across the entire 16-nation eurozone.

The euro, which had hit a year low of 1.3202 dollars on Wednesday, bought 1.3242 dollars in Tokyo afternoon trade, compared with 1.3244 dollars in New York late Thursday, and 124.55 yen against 124.46.

The dollar was trading at 94.04 yen compared with 94.07 in New York.

Concerns over Greece’s fiscal health and that of the eurozone hammered markets earlier in the week after the country’s sovereign debt rating was downgraded to “junk” by Standard and Poor’s.

The US credit risk appraiser also downgraded two other eurozone members, Spain and Portugal, stoking speculation that the crisis was becoming contagious and rocking global markets.

AFP