Asian markets rose early Tuesday, as investors shrug off twin
concerns over Greece's debt situation and China's economy, which
led to a plunge in oil prices.
Greece's vote on Sunday to reject creditors' demands, including
pension cuts and tax increases, could put Greece closer to exiting
the eurozone. That led markets in Europe and the U.S. lower, though
the declines weren't as dramatic as expected. The euro is unchanged
against the U.S. dollar, while the yen gained 0.1% against the
dollar.
"It seems that investors either believe that 'Grexit' can still
be avoided, or that, if it does happen, the contagion will be
limited," analysts from Capital Economics wrote in a research
report.
The Nikkei 225 Stock Average rose 1.5% and Australia's
S&P/ASX 200 rose 1.6%, while South Korea's Kospi Composite was
flat.
Nymex crude rebounded 0.8% to $52.93 in early trading after a
7.7% plunge on Monday amid fresh fears about weaker demand from
China, one of the world's largest consumers of raw materials. Oil
prices had their biggest single-day declines in more than three
months Monday.
Meanwhile, banks warned that Malaysia's financial markets could
see further stress, after the country's currency fell to its lowest
level this month since its peg to the U.S. dollar ended in 2005.
Malaysian markets have been under pressure this year as the
oil-exporting nation is hit by falling commodity prices, which have
nearly halved since July last year.
"Among Asian financial assets, Malaysia's are the most exposed
to oil," analysts from ING wrote in a research note. Efforts to
strengthen the ringgit "will give way if oil prices continue to
decline," the bank added.
The ringgit is up 0.2% against the U.S. dollar after hitting
lows of 3.8260 earlier Tuesday.
Malaysia's currency also has come under pressure as political
strain builds against the country's prime minister. The Wall Street
Journal earlier reported that Malaysian government investigators
looking into the activities of state investment fund 1Malaysia
Development Bhd., or 1MDB, had traced almost $700 million in
deposits into what they believe are Mr. Najib's personal accounts.
Mr. Najib has denied wrongdoing.
China's market volatility is starting to spill into global
markets, as Beijing's aggressive efforts to rescue its falling
stock prices casts more doubt on the health of the world's
second-largest economy.
China has rolled out a steady stream of measures to arrest the
selling frenzy that knocked $2.4 trillion in value from China's
equities over the past three weeks. Shanghai recovered modestly
Monday, which some investors and analysts attributed to heavy
buying of blue-chip stocks by state-backed funds.
Over the weekend, brokerages, mutual-fund managers and an
investment arm of the government committed to buying stocks, while
new initial public offerings were halted. Quotas for foreigners to
buy stocks were increased and the central bank pledged to provide
funds to help investors borrow to buy shares.
Write to Gregor Stuart Hunter at gregor.hunter@wsj.com
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