Most Asian shares rallied Monday on hopes Greece will remain in the euro-zone after weekend election results showing a narrow win for a pro-bailout party, although analysts cautioned the advance may be short-lived. Australia's S&P/ASX 200 index (AU:XJO) +1.96% jumped 2%, while Japan's Nikkei Stock Average (JP:100000018) +1.77% , South Korea's Kospi (KR:SEU) +1.81% and Taiwan's Taiex (XX:Y9999) +1.76% each gained 1.8%. China's Shanghai Composite (CN:000001) +0.40% rose 0.4%, while Hong Kong's Hang Seng Index (HK:HSI) +1.01% closed up 1%, with both ending off the day's peak. According to Market Watch, the Sensex (IN:1) -1.77% failed to follow the regional benchmarks, declining 1.5% in afternoon trading in Mumbai, after the Reserve Bank of India left its lending rates unchanged at 8%, disappointing investors many of whom had expected a 0.25 percentage point rate cut. “The apparent victory of pro-bailout parties in Greek elections serves as material for at least a temporary relief rally," said Naomi Fink, head of strategy at Jefferies Japan. Still, she added that “event risk" remains elevated for markets ahead of the Group of 20 and Federal Open Market Committee meetings this week. The broad regional gains came as early results from the weekend parliamentary elections in Greece projected the New Democracy party would win and form a coalition government that is expected to honor the country's commitments when it received a financial bailout. The lead-up to the Greek poll and worries about the future of the euro zone had created waves of anxiety across global markets in recent weeks. The result represented a slim victory over the anti-austerity Syriza party, which had vowed to tear up the terms of Greece's bailout. BNP Paribas strategists said that while the near-term prospect of a Greek exit from the monetary union had diminished, “uncertainty is likely to remain high once the new government is sworn in." “A renegotiation of the Troika [funding] program is likely, but it will probably imply some official debt forbearance and won't be plain sailing," the strategists said. Troika refers to the European Union, European Central Bank and International Monetary Fund. Shares in the financial, resource and export sectors were among the notable gainers. Sony Corp. (JP:6758) +4.18% SNE +1.54% jumped 4.2%, Mazda Motor Corp. (JP:7261) +6.00% MZDAY +10.68% spiked 6% and Nomura Holdings Inc. NRSCF +1.40% (JP:8604) +2.58% NMR +2.62% rose 2.6% in Tokyo; in Sydney, investment bank Macquarie Group Ltd. (AU:MQG) +2.63% MQBKY +1.75% put on 2.6% and mining giants BHP Billiton Ltd.BHP +2.28% (AU:BHP) +2.51% and Rio Tinto Ltd. RIO +3.37% (AU:RIO) +4.59% gained 2.5% and 4.6%, respectively. Hyundai Motor Co. HYMTF +0.70% rose 3.5% and Samsung Securities Co. climbed 2.4% in Seoul; in Hong Kong, energy producer Cnooc Ltd. (HK:883) +2.11% CEO +4.57% gained 2.1% and Standard Chartered PLC SCBFF +2.07% (HK:2888) +2.28% added 2.3%. Chinese property developers performed well on mainland bourses as well as in Hong Kong on an improvement in risk-appetite and after data showing May property price data showed a smaller decline in housing prices. Shimao Property Holdings Ltd. (HK:813) +3.20% SIOPF +19.62% gained 3.2% and China Overseas Land & Investment Ltd. (HK:688) +2.71% CAOVY +4.45% gained 2.7% in Hong Kong, Poly Real Estate Group Co. (CN:600048) -16.56% added 1.7% in Shanghai, and China Vanke Co. CVKEY 0.00% rose 0.9% in Shenzhen. Among other movers, bourse operator Hong Kong Exchanges & Clearing Ltd. (HK:388) -4.45% HKXCY +1.63% slumped 4.5% after it announced Friday the acquisition of London Metal Exchange, with some analysts concerned over the deal's price tag of $2.2 billion. Shares of Lynas Corp. (AU:LYC) +6.25% surged 6.3% after the Australian rare-earths miner said it is able to meet new conditions imposed on a temporary license it's seeking to operate a refinery in Malaysia. Shares of Fairfax Media Ltd. (AU:FXJ) +7.44% FFXLY 0.00% soared 7.4%, after the firm said it would cut 1,900 jobs over the next three years and shift its flagship broadsheet newspapers to tabloid format, in a push to become a digital-media company. Shares in India retreated after the RBI left its benchmark lending rate unchanged at 8%, citing concerns about inflation. Shares of ICICI Bank Ltd. (IN:532174) +3.11% IBN +1.54% dropped 4%, HDFC Bank Ltd. (IN:500180) +2.52% HDB +2.31% gave up 3% and property major DLF Ltd. (IN:532868) +2.77% sank 4.9% in afternoon trading.
