Asian markets will feel the reaction from the latest from the Greece bailout talks later today, with Australia first to be hit.
The talks will go on this week, and perhaps into next weekend, if Greece passes legislation to enact the reforms wanted by its creditors.
The country’s banks remain on life support and will need more aid from the European Central Bank to survive the next few days. That aid is uncertain.
Greece needs a reported 82 billion to 86 billion euros ($122 to $128 billion) for this bailout. The aid Greece is looking for is to prevent collapse. Then it will go into talks for a new bailout, according to reports in The Financial Times and on Reuters.
The suspense has been extended until later in the week – Thursday at best guess, perhaps next Sunday, perhaps into next week, perhaps for the next few months. No one knows really the timing anymore.
Eurozone leaders reportedly told Greece at an emergency summit overnight Sunday, our time, that it must enact key reforms this week to restore trust before they will open talks on any new financial rescue to keep it in the European currency area.
The leaders want Prime Minister Alexis Tsipras to push legislation through the country’s parliament to convince the rest of the Eurozone to release billions of euros that will avert a state bankruptcy. Then they will start negotiations on a third bailout programme.
The measures demanded by the Eurozone include tax and pension reforms and these will have to be approved by Wednesday night and the entire package endorsed by parliament before talks can start, according to media reports this morning.
For that reason the reaction in markets will be one of confusion with Greece’s financial collapse and possible exit from the euro still a strong possibility.
The share future contract on Saturday had our market starting today with a rise of around 35 points, but that was before the last ditch talks to get a new deal for Greece and keep its banks alive.
US markets rose solidly on Friday night on optimism about Greece, and another positive day of trading in China.
The S&P 500 posted its biggest one-day gain in two months, but ended the week virtually flat. The index closed 25.31 points, or 1.2%, higher at 2,076.62.
The Dow jumped 211.79 points, or 1.2%, to 17,760.41 and managed a tiny out 0.2% weekly gains. The Nasdaq rose 75.30 points, or 1.5% to 4,997.70, but finished the week 0.2% lower.
The benchmark Shanghai Composite ended the volatile five days with its best back-to-back gain since 2008. It jumped 5.8% on Thursday and added another 4.5% on Friday.
From a low on Thursday it rebounded by 15% as the government regained control.
In Australia the ASX200 finished the week on 5492 points, up 0.4% for the day, but down 0.8% for the week. The All Ordinaries closed at 5478.1, up 0.4% for the day, but down 0.9% for the week, its third straight weekly loss.
