While Beijing’s increasingly frantic attempts to stem a stock market rout look to be finally paying dividends, with Thursday’s bounce followed by further gains on Friday, worries persist.
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The Dow Jones industrial average closed up 33.2 points, or 0.19 per cent, to 17,548.62.
Hopes on a deal for Greece is likely to support Asian shares, though volatility in Chinese shares will likely need to ease off further before many investors step up buying.
“There’s so much talk about Greece, but precious little reaction really”, said a senior trader with one global bank in London.
“Shanghai’s early losses were like a cliff-dive, which had a huge impact on investor sentiment”.
“Originally, many wanted to hold blue chips”.
“The Chinese market has shown a nice rebound for a day but it is important to note that numerous owners are restricted from selling their shares and half the companies have suspended trading“, said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin, Texas.
Though the Greek debt crisis was on the back burner, it continued to smoulder.
While the currency moves on Greece have been muted, attention will still be glued to proposals expected from Athens for a deal to keep Greece and its banks financially afloat.
European Council President Donald Tusk called a eurozone summit for Tuesday to discuss the Greek debt crisis in the wake of Greece’s bailout rejection.
The euro dropped to a five-week low against the dollar after the ECB left emergency liquidity aid for Greek banks at current levels, but increased the haircuts on the collateral it demands.
The dollar traded lower against the euro and yen on Wednesday, after minutes from a June meeting of Federal Reserve policy makers revealed that several members of the rate-setting committee would be hesitant to raise rates with the threat of a Greek exit from the euro looming over Europe’s economy.
The Australian dollar, often used as a liquid proxy for China plays, slumped to a six-year low against the greenback of USD 0.7389.
The Standard & Poor’s 500 index lost 17 points, or 0.9 percent, to 2,051.
The euro (EUR=) fell about 1.4 percent against its US counterpart to $1.0955 (EUR=), and by 2.1 percent against the yen to 133.50 yen (EURJPY=).
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United States crude erased early gains and dropped 0.7 percent to Dollars 51.99 a barrel, in the wake of an 8 percent fall between Monday and Tuesday which pulled the contract to levels last seen in April. Brent crude was slightly higher on the day at $58.63 a barrel, but still more than 2 per cent down for the week.
