Forexpros – Asian stock markets were higher on Tuesday, regaining some of the previous day’s sharp plunge, but price action was expected to remain volatile as Greece struggles to form a government after voters punished the country’s pro-bailout parties.
During late Asian trade, Hong Kong’s Hang Seng Index eased down 0.1%, Australia’s ASX/200 Index rose 0.3%, while Japan’s Nikkei 225 Index added 0.7%.
Asian equities suffered heavy losses Monday as investors cut their exposure to riskier assets amid concerns over the impact of weekend elections in France and Greece on the euro zone’s ongoing debt crisis.
But market sentiment improved slightly after reports surfaced that Spain will present new measures Friday to support its ailing banking sector.
Appetite for risk assets was likely to remain fragile as the Greek election results threw the future of the country’s international bailout agreement into doubt and fuelled fears over a possible Greek exit from the euro zone. Efforts to patch together a coalition government in Greece so far have failed.
In Japan, the Nikkei rebounded from the biggest one-day drop in six months as investors stepped in to the market to pick up stocks of Japanese exporters, which came under heavy pressure during Monday’s sell-off.
Shares in automakers Honda and Nissan climbed 2.2% and 3.15% respectively, while electronics manufacturer Toshiba rose 2.9%, as investors positioned themselves in the stock ahead of the company’s earnings report due out after the closing bell.
On the downside, social gaming companies Gree and DeNA continued to fall, after plunging more than 20% on Monday on a report that Japan’s consumer agency may clamp down on online games with gambling aspects.
Meanwhile, shares in Hong Kong fluctuated between modest gains and losses as investors awaited earnings results from index heavyweight HSBC Holdings later in the day.
HSBC shares were up 0.9%, but other shares in the sector were mostly lower. China Construction Bank shares declined 0.5%, while Industrial and Commercial Bank of China dipped 0.6%.
Hong Kong-based exporters with high exposure to Europe were mixed, with Esprit Holdings adding 1.4%, but Cosco Pacific dropped 1.6%.
Elsewhere, in Australia, market participants were cautious as they awaited the release of the country’s federal budget later in the day.
Looking ahead, the outlook for European stock markets was mildly lower, as concerns over political uncertainty in Greece and France continued to weigh.
The EURO STOXX 50 futures pointed to a decline of 0.55%, France’s CAC 40 futures indicated a drop 0.75%, Germany’s DAX futures lost 0.3%, while London’s FTSE 100 futures declined 0.3%.
Later in the day, Germany was to release official data on industrial production, while European Central Bank President Mario Draghi was due to speak in Frankfurt.
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