Asian markets mostly bounce on Cyprus hopes

Asian markets mostly rebounded on Tuesday while the yen fell against the dollar and euro as concerns over the eurozone abated on news Cyprus was reworking a controversial savings levy. Nicosia and its international creditors have gone back to the drawing board following a global outcry and sell-off on stock markets Monday in reaction to the tax proposal that is aimed at qualifying Cyprus for a much-needed bailout. Tokyo jumped 2.03 percent, or 247.60 points, to end at 12,468.23, Seoul gained 0.53 percent, or 10.38 points, to 1,978.56 and Shanghai climbed 0.78 percent, or 17.41 points, to 2,257.43 while Hong Kong was up 0.24 percent in the afternoon. However, Sydney dropped 0.56 percent, or 28 points, to 4,987.4. Under the proposal set out on Saturday Cyprus agreed that deposits of more than 100,000 euros ($129,000) would be hit with a 9.9 percent charge and a 6.75 percent levy would be imposed for anything below that threshold. The news sparked fears it could reignite the eurozone debt crisis -- possibly leading to similar measures elsewhere -- and hit confidence in other troubled countries such as Spain and Italy. On Wall Street the Dow, which last week hit a record high, finished down 0.43 percent, while the S&P 500 dropped 0.55 percent and the Nasdaq lost 0.35 percent. "Monday's reaction to the Cyprus situation was not unexpected given stocks' stellar performance over the past several weeks," Nicholas Smith, Japan equity strategist at CLSA in Tokyo, said. However, Cyprus baulked at putting the bailout to a vote in parliament as the crippling terms sparked a public outcry, while banks have been closed to stop depositors removing all their cash. The eurozone told Cyprus on Monday to take another look at the proposal, with Eurogroup President Jeroen Dijsselbloem of The Netherlands saying ministers "continue to be of the view that small depositors should be treated differently from large depositors". A eurozone source told AFP that those with savings of less than 100,000 euros would escape paying anything. Currency dealers also welcomed the development. The European single currency fetched $1.2954 from $1.2957 in New York late Monday, while it was up at 123.81 yen from 123.41 yen. The dollar fetched 95.58 yen Tuesday, up from 95.23 yen in New York. On Monday in Asia the European unit was as low as 121.76 yen and $1.2903, while the dollar sat at 94.36 yen. An equity trading director at a foreign brokerage told Dow Jones Newswires: "Despite the recent volatility, stocks retain their vitality, and yesterday's selloff should provide a bargain-hunting opportunity." Oil prices were mixed, with New York's main contract, light sweet crude for delivery in April, gaining six cents to $93.80 a barrel at midday while Brent North Sea crude for May delivery dropped 13 cents to $109.38. Gold was at $1,604.60 an ounce at 0710 GMT compared with $1,602.80 late Monday. In other markets: Taipei rose 0.35 percent, or 27.13 points, to 7,838.47. HTC rose 3.75 percent to Tw$249.0 while Taiwan Semiconductor Manufacturing Co. fell 0.5 percent to Tw$100.0. Wellington was flat, edging up 4.02 points to 4,345.04. Sky Television rose 2.46 percent to N$5.41 and Chorus was up 1.74 percent at NZ$2.92 while Telecom was steady at NZ$2.28.