Asian Shares Rise, Caution Ahead of Greek Polling
06/14/2012| 11:16pm US/Eastern
-- Asia markets up ahead of Greek elections
-- Nikkei adds 0.2%, Hang Seng Index rises 1.3%, S&P ASX 200 up 0.4%
-- Oil gains on stimulus hopes, OPEC request
Asian shares were up Friday following overnight gains in the U.S. on signs central banks plan to try and rescue the global economy, though there is caution ahead of the Greek election over the weekend.
"The mood is turning slightly more positive compared to a week ago, but we remain cautious until we see the results," said Diane Lin, fund manager at Pengana Capital in Sydney, which manages $1.1 billion dollars.
Ahead of the Greek voting this weekend a Reuters report said that central banks are preparing for coordinated action to provide liquidity if the election leads to chaos in the markets.
The U.K. introduced measures designed to shield its financial system from the continuing European crisis, with plans to flood banks with cheap credit in an attempt to jump-start lending to British businesses and households.
The euro strengthened in Asia to $1.2640, adding to its 0.6% rally overnight.
The dollar weakened against the yen to 79.08, compared with 79.35 Thursday night as the Bank of Japan abstained from introducing further easing measures. The central bank decided to maintain the size of its asset purchase program at 70 trillion yen--its main tool for easing in an environment where interest rates are close to zero.
The Australian dollar was trading above parity against the U.S. dollar at $1.0026.
Japan's Nikkei was up 0.2%, South Korea's Kospi was down 0.6%, while Australia's S&P ASX 200 was up 0.4%. Hong Kong's Hang Seng Index gained 1.3%, the China Shanghai Composite edged up 0.2%, and Singapore's STI was 0.5% higher.
Oil was up 0.9% on Friday, at $84.62 a barrel, adding to gains made Thursday night. In addition to broad hopes for stimulus, the price of crude was helped by a request from OPEC for its members to cut production to maintain the cartel's oil-output ceiling.
South Korea's Kospi was dragged down by selling by foreign investors and the poor performance of Samsung Electronics, which dropped 2.9% after operations at some of its flat-panel manufacturing lines were suspended because of a power cut in Tangjeong, south of Seoul. Operations have been restored and the company is assessing damage.
Fashion retailer Esprit gained 8.2% in Hong Kong after the outgoing chief executive in a conference call late Thursday tried to subdue speculation that the company has fundamental problems by reiterating that his resignation is owing to family reasons. Upheaval in the company's senior management saw the company lose 31.5% of its value over the prior two sessions.
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