Asian shares up after Greece vote U-turn

HONG KONG, Nov 4 (AFP): Asian markets rose Friday as Greece scrapped plans for a national vote on last week's eurozone rescue package, which had drawn condemnation and shocked world markets. Investor confidence was also boosted by a surprise rate cut by the European Central Bank. Tokyo finished up 1.86 per cent, or 160.98 points, at 8,801.40, Sydney jumped 2.62 per cent, or 109.3 points, to 4,281.1 and Seoul climbed 3.13 per cent, or 58.45 points, to 1,928.41. Hong Kong surged 3.12 per cent, or 600.29 points, to 19,842.79 and Shanghai gained 0.81 per cent, or 20.20 points, to 2,528.29. "While the (Greek) show remains far from over, markets nonetheless breathed a huge sigh of relief on the news," the referendum may not go ahead, DBS Group said in a note, according to Dow Jones Newswires. George Papandreou said a referendum would not have to be held if the Greek opposition backed the rescue package hammered out by European leaders last Thursday. The opposition has already given its support to the deal. The Greek leader has been under pressure to get his house in order from colleagues at a G20 summit meeting in Cannes, France, this week. Papandreou, who faces a confidence vote in parliament on Friday, told members of his socialist PASOK party that Greece had to implement the terms of the rescue package or face a humiliating exit from the 17-nation eurozone. "Rejecting the plan via a 'No' vote in a referendum, holding early elections, or not getting a (parliamentary) majority in favour of the package would mean leaving the euro," he said. While he stopped short of formally announcing the referendum was scrapped, Finance Minister Evangelos Venizelos was more forthright. He said: "From what we have understood from the speech of the prime minister, the government and therefore the country, is officially announcing that it is not heading towards organising a referendum." He later announced Athens had officially abandoned plans for a vote. Global markets rallied last week after the eurozone unveiled a deal to tackle the region's debt crisis that would see Greece's bondholders take a loss on their investments, banks recapitalise and a bailout fund boosted. It also provided a fresh rescue package for Greece as long as it agreed to more austerity measures. However, Papandreou shocked the world Monday by saying he would put the bailout deal to a referendum, raising the prospect it would be rejected by a nation already fed up with swingeing cuts. Adding to Friday's buying sentiment was the European Central Bank's decision earlier to cut interest rates a quarter of a point to 1.25 percent, a shock move by the bank's new chief Mario Draghi. European stock markets rose Friday with London's FTSE 100 index advancing 0.62 per cent to 5,579.98 points, Frankfurt's DAX 30 climbing 0.69 percent to 6,175.43 points and in Paris the CAC 40 added 0.57 per cent to 3,213.13. The euro firmed to $1.3838, up from $1.3808 late in New York Thursday. While the ECB rate cut initially sent the euro lower, the common currency soon rebounded, helped by the news from Greece, edging up to 107.99 yen from 107.81 yen. The dollar was barely changed at 78.02 yen, from 78.03 yen. On Wall Street Thursday the Dow rose 1.76 per cent, the Nasdaq gained 2.20 percent and the S&P 500 was 1.88 percent higher thanks to strong earnings figures from foods giant Kraft and cellphone chip maker Qualcomm. Dealers will be looking to Washington later in the day as the government releases the latest non-farm payrolls data for a hint at the state of the US economy.