Asian Equities Tentative on Greece

Asian shares edged up and the euro sagged in early Asian trading on Tuesday as Greece lurched toward defaulting on a looming debt payment, raising the likelihood of the cash-strapped nation’s exit from the euro zone.  MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.1 percent, while Japan’s Nikkei stock index .N225 added 0.2 percent.

“All in all many in the market had already factored in the likelihood of Greece defaulting. But there is no guarantee the stability will last. What is worrying is the volatility in the risk asset markets, which could impact currencies,” said Kyosuke Suzuki, director of forex at Societe Generale in Tokyo.  Greece will not pay a 1.6 billon euro loan installment due the International Monetary Fund on Tuesday, a Greek government official told Reuters, after talks between Athens and its creditors broke down over the weekend when Prime Minister Alexis Tsipras called a surprise referendum on the austerity plan.

Asian investors were also nervously awaiting the reopening of China’s markets after stocks plunged further on Monday, taking losses to more than 20 percent since their mid-June highs.  Fears about the fallout of the Greek crisis have roiled global markets. The CBOE Volatility “fear” index .VIX, a measure of the premium traders are willing to pay for protection against a drop in the S&P 500, jumped more than 30 percent to a nearly five-month high.

Reuters

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.