Nov. 4 - Asian shares bounced back and the euro steadied on Friday on hopes Greece will abandon a proposed referendum on a European Union bailout; Loss-making Sony and scandal-hit Olympus plunge. Toshi Maeda reports.
Asian shares bounced back and the euro steadies on Friday (November 4) on hopes Greece will ditch bailout referendum. But investors remained cautious over a confidence vote later in the day in the Greek parliament. Greek Prime Minister George Papandreou agreed to step down and make way for a negotiated coalition government on the condition that his Socialist lawmakers back him in the confidence vote. Following the development in Greece that sent stocks higher across the world overnight, Hong Kong's benchmark Hang Seng and South Korea's Kospi index both jumped 3 percent by mid-day. Japan's Nikkei closed up 1.9 percent. Market sentiment was also supported by the European Central Bank's surprise rate cut of 25 basis points Thursday (November 3), the first meeting under new President Mario Draghi. Draghi said the euro zone could enter a "mild recession" later this year. But Hong Kong-based JP Morgan economist Andrew Economos was optimistic, predicting more stable market performance, at least in Asia, in the fourth quarter. (SOUNDBITE) (English) ANDREW ECONOMOS, HEAD OF SOVEREIGN AND INSTITUTIONAL STRATEGY FOR ASIA OF JPMORGAN ASSET MANAGEMENT, SAYING: "We will continue to have more volatility until the politics stablise. But in reality most of the heavy lifting is done at this point. I think we are probably looking for fairly reasonable and fairly good markets. So we are more constructive going to the fourth quarter and looking as if most of the political risk is at least not settled but at least within the camp of being known." In Tokyo, shares in Sony fell lost 8 percent as investors questioned whether the Japanese firm can successfully turn around its loss-making TV business, after the company's warning of a fourth consecutive year of losses sent shockwaves earlier this week. Scandal-hit Olympus, meanwhile, dropped as much as 12 percent in early trading, after the company said it will not announce its quarterly earnings next week as scheduled. In South Korea, LG Electronics shares continued to fall after the firm announced a $950 million rights issue on Thursday (November 3)to help turn around its troubled smartphone business. Toshi Maeda, Reuters.