Asian economies were relieved when Sunday’s Greek elections yielded a new government involving the New Democracy Party, with a pro-bailout platform, easing fears of a Greek euro zone exit.
The Financial Times reported a sharp rise in Asian shares following the news: Tokyo’s Nikkei 225 stock average was at its strongest since March with a 2.2% increase, China’s Shanghai Composite soared 0.3%, Hong Kong’s Hang Seng by 1.6%, Seoul’s Kospi by 2.3%, while Australia’s S&P/ASX 200 index rose 1.7%.
Asian countries underlined the urgency for financial stability in the region’s most critical export market, amid weakening US recovery and economic slowdown in China, according to The Nikkei. Asian traders are still cautious as the New Democracy party plans a coalition government with socialist Pasok party and whether the coalition will form a stable government.
China expressed hope that the new government’s bailout deal will keep Greece from leaving the single currency zone. Chinese Vice Finance Minister Zhu Guangyao told The Nikkei on the sideline of the G20 summit in Los Cabos, Mexico, that China, along with BRICs (Brazil, Russia and India) would increase contributions to the International Monetary Fund.