by Danny McCord
Hong Kong, May 28, 2012 (AFP) – Asian markets rose on Monday as an opinion poll indicated a victory for pro-austerity conservatives in next month’s Greek general election, but gains were tempered by concerns about Spain.
The euro also saw a small “relief rally” on hopes that a win for one of the two main groups in the June 17 vote would mean Athens sticks to its European Union-International Monetary Fund bailout terms and stays in the currency bloc.
Tokyo gained 0.05 percent, Hong Kong added 0.31 percent by the break, Sydney climbed 0.80 percent and Shanghai edged up 0.10 percent.
Seoul was closed for a public holiday.
A string of polls on Sunday showed the New Democracy party on course to win most seats in the election, albeit without an overall majority, with as much as 25.8 percent of the vote.
Investors were cheered by the news after the last election on May 6, when 70 percent of voters refused to back parties supporting the stringent terms imposed on Greece for its much needed bailout cash.
There have been fears that the radical leftwing Syriza party — which is opposed to the EU-IMF deal — will make more gains, which would eventually see Athens leave the euro.
“Poll results in Greece have the potential to be the key driver of investor strategy over the next two weeks,” Ric Spooner, chief market analyst at CMC Markets said in a note.
“If a realistic possibility of an effective pro-bailout government emerges, we are likely to see risk being re-priced and a rally in equity markets,” he added, according to Dow Jones Newswires.
On currency markets the euro — which last week briefly fell below $1.25 to its lowest level since July 2010 — bought $1.2589 and 99.95 yen in Asian trade, slightly up from $1.2515 and 99.66 yen in New York late Friday.
The dollar was trading at 79.41 yen against 79.64 yen in New York.
Traders are also nervously looking across the Mediterranean at Spain, where troubled lender Bankia asked the government for 19 billion euros in what would be the largest bank bailout in the country’s history.
The plight of Bankia — which holds about 10 percent of the nation’s bank deposits — has added to the concerns over the crisis gripping Spain and the rest of the eurozone.
“The market’s sense of caution is clearly spreading from Greece to Spain now,” said Toshiyuki Kanayama, market analyst at Monex Inc.
New York’s main oil contract, West Texas Intermediate crude for delivery in July rose 86 cents to $91.72 per barrel while Brent North Sea crude for July gained 63 cents to $107.46.
Gold was at $1,576.05 an ounce at 0430 GMT, compared with $1,563.47 late Friday.
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