Shares up in Asia for the start of the third quarter

Published:  2 Jul at 9 AM

The start of the third quarter of the year has been greeted by a rise in share prices in Asia. The lift comes on the back of an agreement in Europe that leaders will shore up the zone’s banks. However, some early gains by the euro were lost as concerns persisted over the continuing debt crisis.

Following a surge of 2.7 per cent on Friday, the MSCI index of Asia shares outside Japan rose by 0.4 per cent. In the second quarter the share index ended 7.4 per cent down after rising over the previous two quarters.

Having gained early on, Japan’s Nikkei ended up 0.2 per cent which meant it was above the 9,000 level reached at the end of last week for the first time in nearly two months. The rally on Friday was spearheaded by traders who had not expected European leaders to be so willing to initiate fresh deals. The scramble was on to cover negative bets as fund managers remained cautious over the sustainability of momentum.

Following a spike against the dollar of 1.7 per cent which saw the euro hit $1.2693 it settled at $1.2617, a fall of 0.4 per cent. According to analysts the agreements in Europe have given the euro a lift, but there is likely to be a limit to the upside as leaders work out the details. Eyes are now turning towards a jobs report to be published by the US later in the week.

Financial bosses in the EU have indicated that a single banking supervisor will be created around the central bank which will bring the establishment of a European banking union a step closer.