Asia mostly upbeat on Greece bailout plans

Euro surges to three-week highs, helping risk appetite

It turned out to be a stronger Monday for the Asian stocks, as the investors cheered the media reports of a EU bailout for Greece. The euro gained today for a third day against the dollar and stronger commodities spurred the hopes of the equities extending their recent gains. The world stocks have been gaining in the last few days on idea that the stronger global economic growth would keep the sentiments upbeat and even as a busy earrings season gets off to a start, there is still some upside potential for the risky assets. However, overheating worries in China kept the Chinese stocks under check, making the markets extend their recent slide.

The Euro finance ministers holding emergency talks on Sunday agreed to fund up to 30 billion euros of emergency loans to debt-stricken Greece, at interest rates of around five %. The euro surged against the dollar and yen on these reports and ticked up right from the start. The single currently broke above 1.3600 to top a three-week high amid the early London trades. Under the EU agreement, euro-zone nations will provide up to EUR30 billion for the country in the first year of any support programs. Greece would pay an interest rate of around 5% for a three-year loan program, well below the interest rate of more than 7% on Greek sovereign debt last week.

The Australian stocks jumped on the first day of the new trading week, lifted by resource related stocks on optimism about economic recovery. Positive closing on Wall Street in the previous session on Friday with Dow Index ending near the psychological 11,000-mark and the announcement of a bailout package from European Union to assist Greece also lifted market sentiment. The All Ordinaries Index surged past the 5,000-mark for the first time in 18 months. The benchmark S&P/ASX200 Index gained 36.20 points, or 0.73% to close at 4,984, while the All-Ordinaries Index ended at 5,012, representing a gain of 38.70 points, or 0.78%.

A report released by the Australian Bureau of Statistics revealed that the total value of home loans extended in the country were down a seasonally adjusted 3.4% month-on-month to A$20.49 billion in February. As per the report, the number of home loans extended, in volume terms, decreased 1.8% to 50,287 in February. The report further noted that the volume of loans extended for the construction of new dwellings were down 3%, and those for the purchase of established dwellings were down 1.8%. Home loans for the purchase of new dwellings were up 0.7%.

The stock market in Japan also ended up, adding to its recent flurry of gains. , lifted by exporters on weaker local currency, especially against the Euro and the Dollar Positive closing on Wall Street in the previous session on Friday, finalization of a package by EU to extend assistance to Greece and positive trading across other markets in the region lifted market sentiment. Export stocks advanced on optimism that the global economic recovery will continue to sustain the pace and momentum. The benchmark Nikkei 225 Index rose 47.56 points, or 0.4%, to 11,252, while the broader Topix index of all First Section issues advanced 5.36 points, or 0.5%, to 995.

On the economic front, minutes of the recently concluded Bank of Japan monetary policy board meeting held on March 16-17 revealed that the members of the policy board were surprised at how quickly the global economy was showing signs of improvement, while expressing concerns that the recovery could remain fragile. The board members conceded that uncertainty remains high regarding the outlook for capital spending, but they agreed that private consumption would remain flat and that deflationary pressures would begin to moderate.

In a separate statement, the Bank of Japan revealed that the country's M3 money stock increased 2% year-on-year in March, in line with analysts' expectations, following similar increase in the previous month. The statement further noted that the value of M2 money stock plus CDs was up 2.6% on year, roughly in line with expectations for a 2.7% annual increase following the 2.7% gain in the previous month.

Additionally, the Bank of Japan stated that bank lending in the country declined 2.0% on year in March, after shedding an annual 1.6% in February. The central bank further noted that bank lending, including trusts, declined 1.8% on year after shedding an annual 1.5% in the previous month. Adjusted bank lending was down 1.7% on year after retreating an annual 1.3% in February.

Chinese stocks slipped though. The main stock index closed down 0.51, pressured by a tumble in the property sector after the country's top banking regulator ordered banks to take fresh steps to rein in risky lending to land developers. The Shanghai Composite Index closed at 3,129.263 points. The Shanghai property index slumped 2.57 %. China's banking regulator told lenders to report on their risk exposure to borrowers including local government companies by the end of June to help prevent the nation's record credit boom from causing more bad loans.

Lending by Chinese banks fell 43 % in the first quarter from a year earlier as the government winds down its stimulus and tries to cool a credit boom while keeping its recovery on track, central bank data showed Monday.

Banks lent 2.6 trillion yuan in the January-March quarter, the People's Bank of China said on its Web site. That compared with 4.6 trillion yuan ($670.6 billion) in loans in the first quarter of 2009 as banks ramped up loans for construction and other projects as part of a 4 trillion yuan ($586 billion) stimulus. However, this slowing down may still not be good enough to curb the runaway rally in asset prices, which has clearly bought out he overheating concerns in the world's fastest growing economy.

Over the weekend, the government reported China ran its first trade deficit in nearly six years in March, as a surge in imports outpaced export growth. Officials said the trend was likely to be short-lived but signaled a return to more balanced trade after years of massive surpluses.

In Mumbai, a spat between regulators on oversight of unit linked insurance products or Ulips weighed on the domestic bourses in what was a volatile trading session. BSE 30-share Sensex was down 68.17 points or 0.38% to 17,864.97 as per provisional figures. The Sensex rose 62.11 points at the day's high of 17,995.25 in early trade. The index fell 116.95 points at the day's low of 17816.19 in mid-afternoon trade.

The market bounced back soon after opening with a downward gap. The market slipped into the red shortly. The market came off the lower level after hitting a fresh intraday low in morning trade. The intraday recovery gathered further steam later, with the key indices turning positive in afternoon trade tracking gains in European stocks. But the market soon slipped into the red. The market hit a fresh intraday low in mid-afternoon trade. It came off the lower level later.

In other markets, Seoul Composite ended at 1,710, down 14 points or 0.8%, while Straits Times is at 2,974, higher by two points and Taiwan Weighted closed at 8,117, up 25 points or 0.3%.

Crude oil slipped after initial gains as prices fell to break above $86 per barrel levels. The commodity started off well but turned lower after hitting a high of %85.71 per barrel. The prices had hit a fresh 18-month peak above $87 per barrel last week, as sentiments remained strong despite comfortable inventories and the strong undertone in the US dollar. The benchmark West Texas Intermediate contract settled at $84.92 a barrel on 9th April after surging above $87 a barrel early in the week and then declining for three straight sessions.