Investing.com - Asian shares gained on Monday as talks over a way forward on Greece's bailout edge forward in fits and starts with the latest compromise centered on some form of reform guarantee conditions acceptable to all sides, reports said.
The Nikkei 225 rose 1.65%, while the S&P/ASX 200 gained 0.60% and the Hang Seng index inched up 0.22% by the break. The volatile Shanghai Composite index also held its own up 2.28%.
Eurozone leaders and Greece are considering a new compromise - but two main issues remain, the International Monetary Fund's role after the March 2016 expiration of its funding program, and a trust fund proposed by Germany to be established in Luxembourg and holding €50 billion in Greek state assets as collateral for a loan that may reach as much as €86 billion - as the current talks reached a marathon 13 hours.
In the interim, Greece may get €7 billion in "bridge" finance before July 20 to enable it to make payments and keep the banking system afloat while parliament passes a long list of tough reforms, EU sources said of the most promising effort so far in last-minute talks on Sunday to secure a deal.
According to an assessment drafted by the Eurogroup and provided to euro zone leaders in Brussels on Sunday, Greece needs a total of €7 billion before July 20 to cover its financing needs, with €3.5 billion of that amount being owed to the European Central Bank.
Leaders are discussing using a mixture of €1.9 billion still owed to Greece from profits the ECB made as part of its securities markets program as well as a potential cash disbursement from €13 billion still lying dormant inside the European Financial Stabilisation Mechanism, an old bailout fund created in 2010 to provide financial assistance to EU member states.
A qualified majority inside the ECOFIN Council, which means 16 out of 28 countries, would have to vote in favor of it, according to reports.
Last week, U.S. stocks rose broadly on Friday ending a choppy, tumultuous week, amid optimism for a comprehensive deal between Greece and its international creditors over the weekend.
Boosted by a rally from Apple Inc (NASDAQ:NASDAQ:AAPL), the Dow Jones Industrial Average and NASDAQ Composite index surged on Friday, each gaining more than 1.2% on the final day of trading this week. The S&P 500 Composite index also posted gains of more than 1%, as the major indices moved higher for the month of July.
U.S. equities pared some of the gains in afternoon trading after Janet Yellen reaffirmed that the Federal Reserve is on track to raise interest rates at some point this year. Speaking at a luncheon at The City Club in Cleveland, Yellen downplayed the importance of the Fed's first rate hike in more than a decade, preferring to focus on the gradual pace of policy normalization on a longer-term basis.
"I want to emphasize while there is a lot of public discussion on that first move we should not over emphasize the timing of that first move," Yellen said. "What is really going to matter is the entire path of interest rates over time. My own view is that the headwinds that have been holding back recovery for all these years are receding and conditions are improving."
While the Dow fell by roughly 15 points following Yellen's comments it still remained up by more than 200 points on the session before rallying even further near the close. The Dow closed the week at 17,760.41, up by 211.79 or 1.21% on Friday's session. The NASDAQ, meanwhile, soared to an intraday high of 5,008.05, experiencing its best one-day move since late-January, before falling back to 4,997.70, up 75.30 or 1.53% on the session.
The S&P 500 added 25.31 or 1.23% to 2,076.62, as stocks on all 10 sectors closed in the green. Stocks in the Consumer Services, Technology and Health Care sector led, each gaining more than 1.3%.