[h=3]By DANIEL INMAN[/h]Asian stocks moved higher on Monday and the euro rose after Cyprus reached a preliminary agreement on a bailout deal.
Late night negotiations in Europe made progress early Monday, as Cyprus and its international creditors agreed on the structure of a bailout, a senior European Commission official told Dow Jones Newswires. Under the agreement Laiki Bank, Cyprus' second largest lender, would be split into a "good" bank and a "bad" bank. In addition, there would be no levy on Cyprus deposits of less than €100,000.
"It does appear that the near-term risks have been addressed by the European authorities," said Matthew Sherwood, head of investment market research at Perpetual in Sydney.
"There was always the hope and expectation, even the knowledge, that Cyprus would have to swallow its medicine and do what the troika told them to do," said Mr. Sherwood.
Asian markets have been the first to react to weekend developments in Cyprus for the second consecutive week, after investors spent much of last week assessing whether a bailout deal could be reached, or whether the situation on the island was the start of a new chapter in Europe's debt crisis.
There was some urgency to the talks, as the European Central Bank had said that it would cut off its liquidity assistance to Cyprus on Tuesday if a deal was not reached.
The euro jumped on the news of a preliminary agreement, with the single currency recently at $1.3026 compared with $1.2988 late Friday in New York.
The yen weakened against the U.S. dollar—the greenback was recently at €94.91 compared with ¥94.50 late Friday.
Japanese stocks were helped by the weaker yen, with the Nikkei up 1.4%.
South Korea's Kospi added 1.6% and Australia's S&P/ASX 200 added 0.7%.
Write to Daniel Inman at [email protected]
Late night negotiations in Europe made progress early Monday, as Cyprus and its international creditors agreed on the structure of a bailout, a senior European Commission official told Dow Jones Newswires. Under the agreement Laiki Bank, Cyprus' second largest lender, would be split into a "good" bank and a "bad" bank. In addition, there would be no levy on Cyprus deposits of less than €100,000.
"It does appear that the near-term risks have been addressed by the European authorities," said Matthew Sherwood, head of investment market research at Perpetual in Sydney.
"There was always the hope and expectation, even the knowledge, that Cyprus would have to swallow its medicine and do what the troika told them to do," said Mr. Sherwood.
Asian markets have been the first to react to weekend developments in Cyprus for the second consecutive week, after investors spent much of last week assessing whether a bailout deal could be reached, or whether the situation on the island was the start of a new chapter in Europe's debt crisis.
There was some urgency to the talks, as the European Central Bank had said that it would cut off its liquidity assistance to Cyprus on Tuesday if a deal was not reached.
The euro jumped on the news of a preliminary agreement, with the single currency recently at $1.3026 compared with $1.2988 late Friday in New York.
The yen weakened against the U.S. dollar—the greenback was recently at €94.91 compared with ¥94.50 late Friday.
Japanese stocks were helped by the weaker yen, with the Nikkei up 1.4%.
South Korea's Kospi added 1.6% and Australia's S&P/ASX 200 added 0.7%.
Write to Daniel Inman at [email protected]