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Euro maintains gains, Asia stocks advance

Hong Kong: The euro extended its gains against the dollar Tuesday while Asian equities climbed on hopes Greece’s new government will be able to negotiate a bailout deal with the EU and IMF that will avoid it leaving the eurozone.

Regional investors took their lead from advances in Europe and New York, where news of Sunday’s Greek election win for anti-austerity party Syriza had been largely factored in, analysts said.

Tokyo jumped 1.44 percent by lunch, Sydney added 0.67 percent, Shanghai edged up 0.10 percent, Seoul rose 0.46 percent and Hong Kong was flat.

Markets have been buoyed by rhetoric coming out of Athens and its creditors that raises hopes they two sides can reach an agreement over Greece’s repayment of its 240-billion-euro bailout.

Syriza had campaigned on renegotiating terms of the lifeline — which included swingeing spending cuts and painful tax hikes — and there are concerns it will default on its repayments, leading to its possible exit from the eurozone.

But International Monetary Fund head Christine Lagarde said she was prepared to continue its financial support to the country, while some European finance ministers suggested they were willing to talk, as long as Syriza did not demand its debt be wiped out.

The messages coming out of Europe helped shares higher. In Europe, equities in London, Paris and Germany all closed with healthy gains, although Athens lost more than three percent.

Dow edged 0.03 percent higher, the S&P 500 added 0.26 percent and the Nasdaq put on 0.29 percent.

“The Greek elections had the potential to unnerve the market,” Nader Naeimi, at AMP Capital Investors in Sydney, told Bloomberg News.

“It’s quite encouraging that the new government and the EU are willing to negotiate. The market is in a risk-on mode.”

The euro plunged to as low as $1.1098 at one point in Asia Monday, the lowest level since September 2003, before recovering later in the day to close out in New York at $1.1234.

On Tuesday in Asia it bought $1.1250.

It also sank to 131.55 yen Monday in Asia before bouncing to end the day at 133.12 yen. It bought 133.31 yen in Tokyo Tuesday.

The dollar edged up to 118.47 yen from 118.49 yen in US trade.

Oil prices edged up slightly after falling to fresh six-year lows Monday, despite a warning from the OPEC cartel that prices could punch $200 owing to shrinking investment in exploration.

US benchmark West Texas Intermediate for March delivery rose five cents to $45.20 while Brent crude for March gained 13 cents to $48.29.

Gold fetched $1,276.39 an ounce, against $1,281.39 late Monday. (AFP)

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