Asian shares have climbed up as the euro lagged behind in the early hours of trading on Tuesday, with Greece looking almost certain to default on a loan payment to the International Monetary Fund (IMF), stoking fears of the country’s exit from the eurozone.
While MSCI’s broadest index of Asia-Pacific shares outside Japan went up 0.1 percent, Japan’s Nikkei stock index added 0.2 percent, reported The Guardian.
Kyosuke Suzuki, forex director at Societe Generale in Tokyo, said that the market had already factored in the likelihood of Greece defaulting, but added there was no guarantee that the stability would last. He also said that the volatility in the risk asset markets was particularly worrying and could impact currencies.
Greece has to pay a USD 1.8 billion loan instalment to the IMF on Tuesday.
Fears about a possible Greek exit have also impacted the global markets, with the CBOE Volatility ‘fear’ index, a measure of the premium traders are willing to pay for protection against a drop in the Standard & Poor’s 500, rising by more than 30 percent to a nearly five-month high.
US stock futures went up about 0.2 percent in Asia, indicating that a semblance of stability could follow steep losses in the previous session.
Meanwhile, ratings agency Standard and Poor’s slashed Greece’s sovereign debt rating one notch further into junk levels to CCC, saying that there was a 50 percent probability of Greece leaving the eurozone.
The crisis in Greece worsened after the country decided to pull its negotiators out of bailout talks on Friday. The European Central Bank declared on Sunday that it will provide no new emergency support to Greek banks. (ANI)