Hong Kong: Asian markets rebounded Tuesday after the previous day´s rout, despite Greece being just hours away from default, while Shanghai surged in volatile trading that saw swings of more than nine percent.
The euro edged down and analysts warned of sharp movements this week as Greece prepares for a Sunday referendum on creditors´ bailout reform proposals, which European leaders say boils down to an in/out vote on the eurozone.
Tokyo ended 0.63 percent higher, adding 125.78 points, to 20,235.73, Sydney gained 0.67 percent, or 36.5 points, to 5,459.0 and Seoul also put on 0.67 percent, or 13.71 points, to 2,074.20.
Hong Kong jumped 1.50 percent in late trade.
Shanghai´s roller-coaster ride continued, plunging more than 5.1 percent in the morning before bouncing back to rise 4.50 percent in the afternoon as bargain-buyers moved in after a recent hefty sell-off.
Shenzhen was up 2.30 percent, having sunk more than six percent earlier.
Mainland Chinese markets are swinging wildly after collapsing more than 20 percent over the past two weeks and analysts flagged more sharp movements in future.
The Greek crisis sent markets tumbling across Europe and in New York on Monday.
The euro ended Monday higher but edged down on Tuesday.
It bought $1.1194 and 136.92 yen in Asia, against $1.1247 and 137.82 yen in New York.
“Right now the biggest surprise is that the euro is not materially weaker,” Matthew Sherwood, head of investment markets research in Sydney at Perpetual Ltd, wrote to clients.
“Market expectations are that the Greek situation is manageable even if they exit the union,” he said.
The dollar edged down to 122.33 yen from 122.55 yen.
With Greece´s bailout talks completely broken down after Prime Minister Alexis Tsipras called the July 5 plebiscite, the country is widely expected to miss its payment to the IMF due later Tuesday, leaving it in default.
“(How) is it possible the creditors are waiting for the IMF payment while our banks are being suffocated?” Tsipras said in a late-evening TV interview.
With eyes on Sunday´s poll, top European leaders including Germany´s Angela Merkel, France´s Francois Hollande and Italy´s Matteo Renzi called on the Greek people to vote for the creditors´ proposals.
“A ´No´ would mean, regardless of the question posed, that Greece had said no to Europe,” said EU chief Jean-Claude Juncker.
“The political timetable is now unclear due to the surprise of the referendum. We do not know the wording of the question or the questions that will be asked, and so the outcome risks creating even more uncertainty,” David Gaud, a senior fund manager at Edmond de Rothschild in Hong Kong, said.
“The next big deadline is the payment expected on July 20 — to the ECB this time. With the IMF payment already outstanding, the coming month will remain very volatile”.
– China volatility –
In Shanghai dealers bought on the dip after heavy morning selling. The index lost more than three percent Monday, putting it in a bear market and economists warned of further losses as retail investors cash up and margin trades are called in.
The exchange had run up gains of 150 percent in the year to June 12, before profit-takers moved in and authorities started tightening rules on margin trading, in which dealers borrow cash to invest.
In a bid to protect the stock market China´s central bank at the weekend cut interest rates for the fourth time since November and also lowered the amount of cash lenders must keep in reserve.
Speculation is also swirling that officials plan to halt initial public offerings often blamed for sucking up cash from markets.
“No one can tell for sure where the market´s bottom is,” said Castor Pang, head of research at Core Pacific-Yamaichi in Hong Kong.
“The government will need to take more measures to stop the market´s freefall,” Pang told media.
Yingda Securities chief economist Li Daxiao told AFP: “The market started to show signs of stabilisation with blue chip stocks starting to resist the market plunge.
“Positive effects from the rate cut, as well as news of pension fund planning to enter the stock market, have started to kick in to support the market.”
On oil markets US benchmark West Texas Intermediate (WTI) for August delivery fell four cents to $58.29 while Brent crude for August gained 10 cents to $62.11 in afternoon trade.
Gold fetched $1,177.05 compared with $1,177.05 late Monday.
In other markets:
Taipei rose 0.94 percent, or 86.92 points, to 9,323.02.
Taiwan Semiconductor Manufacturing Co closed 1.44 percent higher at Tw$140.5 while Fubon Financial Holding gained 2.85 percent to Tw$61.4.
Wellington rose 0.37 percent, or 21.15 points, to 5,726.96.