BANGKOK (AP) — A last-minute package of rescue loans that saves Cyprus from a banking collapse and bankruptcy helped push Asian stock markets higher Monday.
Finance ministers from the 17 countries that use the euro currency approved the 10 billion euro ($13 billion) bailout plan just hours before a deadline. The European Central Bank had threatened to cut crucial emergency assistance to the country's banks by Tuesday without an agreement.
In return for the bailout, Cyprus must drastically shrink its outsized banking sector, cut its budget, implement economic reforms and privatize state assets.
Cyprus must also raise 5.8 billion euros of its own. To do so, the country's second-largest bank, Laiki, will be restructured and bond holders and holders of bank deposits of more than 100,000 euros will have to take significant losses, European Union officials said. Deposits with all Cypriot banks of up to 100,000 euros will be guaranteed by the state in accordance with the EU's deposit insurance guarantee.
Depending on the deal's details, "the outcome will mean that the risks of Cyprus defaulting and leaving the euro zone will have significantly diminished," said analysts at Credit Agricole CIB in Hong Kong in a market commentary.
Japan's Nikkei 225 index surged 1.9 percent to 12,567.07. Australia's S&P 500 added 0.5 percent to 4,993.20. South Korea's Kospi jumped 1.4 percent to 1,975.33. Stocks in mainland China fell.
Hong Kong's Hang Seng rose 0.7 percent to 22,272.68, although trading volume was somewhat thin. Linus Yip, strategist at First Shanghai Securities in Hong Kong, said the market was being cautious ahead of the release of earnings from the Industrial and Commercial Bank of China, the Agricultural Bank of China and Bank of China this week.
"Chinese banking players will report, so the market is maybe taking a wait-and-see attitude," Yip said.
Banking shares in other markets posted strong gains, evidence of relief amid the financial sector for the Cyprus bailout.
South Korea's Shinhan Financial Group jumped 5.3 percent. Japan's Nomura Holdings advanced 1.9 percent. Australia's Westpac Banking Corp. added 1.7 percent.
Wall Street closed higher Friday, boosted by strong company earnings. The Dow Jones industrial average rose 0.6 percent to 14,512.03. The Standard & Poor's 500 index closed up 0.7 percent at 1,556.89. The Nasdaq composite average closed up 0.7 percent at 3,245.
Benchmark oil for May delivery was up 44 cents to $94.15 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.26, or 1.4 percent, to finish at $93.71 a barrel on the Nymex on Friday.
In currencies, the euro rose to $1.3036 from $1.2983 late Friday in New York. The dollar rose to 94.81 yen from 94.48 yen.
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