Asian markets rise ahead of European summit

HONG KONG: Asian markets rose Tuesday following a strong performance on Wall Street and on hopes EU leaders will come to an agreement on dealing with the eurozone debt crisis at an upcoming summit.

Tokyo gained 0.98 percent by the break, Hong Kong was 0.81 percent higher, Sydney added 0.79 percent, Shanghai rose 0.59 percent, and Seoul climbed 1.16 percent.

Attention is now on an informal meeting in Brussels on Wednesday where the crippling debt crisis that threatens the eurozone project will be top of the agenda.

"People are feeling a little more optimistic because European leaders look as though they might put some strong growth policies in place rather than just austerity," Stan Shamu, market strategist at IG Markets in Australia, told Dow Jones Newswires.

Ahead of the talks dealers were given a boost by Germany and France who said Monday they would do whatever it takes to keep Greece in the euro amid political turmoil in the country.

"We agreed that we have to do everything to keep Greece in the euro club," said German Finance Minister Wolfgang Schaeuble after the first official meeting with his new French counterpart Pierre Moscovici.

Schaeuble hosted Moscovici to thrash out a common line for the summit, after Germany was seen as being more isolated over its drive for austerity as the answer to the ongoing debt crisis.

Greece has returned as the key issue in Europe after polls on May 6 saw 70 percent of the electorate vote against pro-austerity parties but with no overall winner.

Many now fear a new vote on June 17 will see a victory for parties who campaigned against a bailout plan, which would in turn lead Athens to default on its debt obligations and leave the euro.

There are also concerns about the state of Spain's banks, which are staggering under huge bad loans after a 2008 property crash. Economy Minister Luis de Guindos forecast the Spanish economy would contract this quarter at the 0.3 percent rate it has for the past half year. (AFP)