WELLINGTON (BLOOMBERG) - Asian stocks rose with US index futures and the euro amid optimism Greece will forge a deal with creditors and after Chinese shares rallied. The yen retreated with Treasuries as risk appetite returned.
The MSCI Asia Pacific Index added 0.3 per cent by 9:23 a.m. in Tokyo. The gains trimmed the gauge's worst weekly drop since May 2012 to 3.6 per cent, following a rout in China's equity market. Standard & Poor's 500 Index futures gained 0.7 per cent after U.S. stocks rebounded. The euro rallied 0.3 per cent, while the yen lost the same amount.
Greece submitted a reform package similar to that mooted by creditors last month as the indebted nation seeks to remain in the euro and salvage its tattered economy. The proposal, which includes pension savings and tax increases, will be discussed at a European Union summit on Sunday. The biggest US-listed exchange-traded fund tracking Chinese shares surged 20 per cent in New York Thursday, after local stocks rebounded.
"Signs that the proposal Greece has put together has concessions on long-standing issues and is similar to tabled proposals is reducing risk aversion," said Sam Tuck, a senior currency strategist in Auckland at ANZ Bank New Zealand Ltd.. "The fact that China managed to close up across the board has certainly reduced market fear, but it's still very much in the forefront of people's minds."
Greece's proposed reforms were similar to those presented by the European Commission on June 26. They include creditors' longstanding demands for sales tax increases and cuts in public spending on pensions. Greece also proposed the restructuring of its debt and a package of growth measures of 35 billion euros. The proposal will be put before the Greek Parliament Friday.
The Deutsche X-trackers Harvest CSI 300 China A-shares ETF climbed for the first time since June 30, rallying the most on record in New York. Futures on Chinese shares were more mixed in recent trading, with contracts on the CSI 300 Index up 10 per cent, while futures on the FTSE China A50 Index, a gauge of the biggest mainland-traded companies, were little changed.
Hang Seng China Enterprises Index futures added 4.3 per cent before after-hours trading was halted because of a tropical storm. Taiwanese markets are closed Friday as Typhoon Chan-hom approaches the island.
The Chinese rout, sparked by margin investors unwinding trades amid concern over a bubble, took a breather Thursday after regulators banned major shareholders from selling stakes and with more than 50 percent of listed companies suspended from trading.
The magnitude of price swings on the Shanghai Composite gauge was at the highest since at least 2008, with investors including Templeton Emerging Markets' Mark Mobius calling the latest support measures a sign of "desperation."
"China has managed to stop its decline for now using all sorts of government tools," Yutaka Miura, a technical analyst at Mizuho Securities Co. in Tokyo, said by phone. "But once trading resumes in shares that had stopped trading, we'll see more selling. They've stopped falling for now and had an autonomous rebound but I expect a volatile state to continue for some time."