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Monday, 29 December 2014

Asia follows Wall Street up, euro wobbles before Greek vote

A man using his mobile phone walks past electronic boards showing the graph of the recent fluctuations of the Japan's Nikkei average (L) and the Japanese yen's exchange rate against the U.S. dollar (top R) outside a brokerage in Tokyo December 24, 2014. REUTERS/Yuya Shino

Reuters) - Asian stocks rose on Monday, following fresh gains on Wall Street, while the euro wallowed near 28-month lows versus the dollar on nervousness before a vote in the Greek parliament that could result in snap elections.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 1.1 percent. Australian shares rose 1.6 percent.

Tokyo's Nikkei bucked the trend and slid 1 percent as reports of a suspected Ebola case in Japan spooked a market which had thin trading before the year-end holidays. The index was still on track for about an 8 percent gain on the year.

In Malaysia, shares in AirAsia posted their biggest one-day drop in more than three years after one of its aircraft went missing on its way to Singapore from Indonesia.

Spreadbetters expected a higher open for European bourses, forecasting Britain's FTSE to rise by as much as 0.3 percent at the open, Germany's DAX to gain 0.2 percent and France's CAC to rise 0.6 percent.

The Dow and S&P 500 both closed at record highs on Friday after a broad rally.

On the 2015 outlook for risk assets, investors will concerned about whether the robustness of the U.S. economy will be able to offset signs of slowdown in powerhouse China and the euro zone.

The euro inched up 0.2 percent to $1.2200, not far from its lowest since August 2012, at $1.2165, which was hit the previous week.

Greece faces a vote in parliament later on Monday that will decide whether the country's leading coalition can gather enough votes to elect a president.

If it fails, markets are concerned this may trigger a snap election that could bring the leftwing opposition Syriza party to power and derail an international bailout.

Former European Commissioner Stavros Dimas, the candidate for the leading coalition, needs to garner 180 votes in parliament to become president.

If Dimas is elected, the euro could bounce on relief as Greece can continue negotiations with its creditors, said Masafumi Yamamoto, a market strategist at Praevidentia Strategy in Tokyo.

"On the other hand, the euro could fall towards $1.21 if the 180 votes are not secured, as the market will ponder the risk of the left-wing Syriza party, which is against fiscal reconstruction, taking power after a snap election next year," he said.

Even if the euro does draw relief from the Greek vote, it will still face longer-term downward pressure from prospects of further monetary easing by the European Central Bank next year.

The dollar stood firm at 120.200 yen, remaining in sight of a 7-1/2 year high of 121.86 hit earlier in the month, but lacking enough momentum to challenge that peak. This year, the greenback has risen roughly 15 percent against the yen.

U.S. crude oil rebounded on renewed tensions in Libya.

A fire caused by fighting at one of Libya's main export terminals has destroyed more than two days of the country's oil production, officials said on Sunday, as clashes escalated between factions battling for control of the OPEC member nation.

U.S. crude rose 1.3 percent to $55.44 a barrel after shedding 2 percent on Friday. U.S. crude, which fell to a 5-1/2 year low this year, was on track to fall 43 percent in 2014.

Reference: Shinichi Saoshiro

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