World financial markets rose yesterday following Greece's decision to scrap a referendum on its debt bailout and the European Central Bank's surprise quarter-percentage-point cut in interest rates.
Stocks were up across the board in all East Asian markets except Bangkok; Thailand is still wrestling with the damage from floods.
Hong Kong and South Korea outperformed the rest of the region. The Hang Seng Index and the Kospi both climbed more than 3 per cent.
The main Shanghai index finished up less than 1 per cent. The positive news from Europe was muted by continued concerns over slowing exports, extended credit tightening and a possible downturn in the property market as mainland developers started to cut prices.
However, European and US stock markets opened lower yesterday. Overall, markets are still trading at a discount compared with same time last year because of the global climate of political and economic uncertainty.
Diana Choyleva, director of independent research house Lombard Street Research, said the world economy was not likely to get any better soon. 'The crisis in Europe is likely to worsen in the next 12 months ... not only the euro zone is heading for a recession, but the US economy could also be heading for a hard landing in the first half of 2012,' she said.