Most Asian markets
surged in early Monday trading
after a pro-bailout party emerged victorious in this weekend's
highly anticipated elections in Greece.
[caption id="attachment_60171" align="alignright" width="300"
caption="Things are starting to look up in Greece"]
However, although buoyed early by the positive implications of
the victory by a Greek party not explicitly hostile towards the
euro, many Asian markets closed off their initial highs.
While the Greek result is positive for Europe in the short-term,
markets pared some gains after Spanish bond yields continued to
rise and the euro (
The strongest performer among the major Asian markets was the
Japanese Nikkei index (
). The benchmark Nikkei 225 index
jumped 151 points
, or 1.71%. However, at one point the Nikkei was up almost 200
points in early trading.
Financials such as Nomura Holdings and Daiwa Securities
performed particularly well, as demand for the sector increased
with the prospect for a messy default diminished after the
pro-bailout Greek party's triumph. The exchange closed above 8700
for the first time in a month. Although the Nikkei has rallied over
the past few weeks, the exchange is still down 13.5% for the
In Hong Kong, the Hang Seng Index (
also finished at a one month-high
. However, Hong Kong was unable to replicate the gains in Japan,
closing up a little over 1%. Like Japan, Hong Kong was unable to
hold its initial gains, with trading falling off later in the day.
Developers outperformed, even though Chinese housing prices
weakened in May. CNOOC (
) rose 3.2% as the increase in the price of crude boosted the oil
Elsewhere in Asian markets, the Taipei Taiex (
) rose 1.76%, for similar reasons to those that affected the
Nikkei. The Shanghai Composite (
) rose only 0.42%. However,
analysts are less sanguine about the Chinese market
as the Shanghai Composite is currently facing significant
resistance. Observers fear these gains will be ephemeral.
The major outlier among Asian markets was the Bombay Sensex (
). The Indian benchmark dropped 1.4% as hopes faded that the
Reserve Bank of India would lower interest rates in an attempt to
bolster its fading economy
. As a result, interest-rate-sensitive equities such as financials
and automobiles dropped. U.S. investors should expect a drop in
ADRs like ICICI (
) and Tata Motors (
) in New York trading on Monday.