Asian shares extend rally on Europe deal, US data

HONG KONG: Asian markets extended their rally Friday from the previous day after European leaders finally came to an agreement on a plan to tackle the region's sovereign debt crisis.

Adding to the relief was data from the United States showing the world's biggest economy grew at a strong pace in the three months to September, easing fears of a new recession there.

Tokyo gained 1.36 percent by the break, Hong Kong surged 2.35 percent on opening, Sydney added 0.73 percent, Seoul climbed 1.72 percent and Shanghai was 1.26 percent higher.

Traders remained bullish after a deal was struck in the early hours of Thursday that will see 100 billion euros ($140 billion) of Greece's debts wiped out, banks reinforce their capital defences and a bailout fund getting a huge boost.

"In general, markets are happy that the decision-making process seemed to be finally working and willing to put back the lack of detail on the back burner for another day," said Stewart Hall, a senior currency strategist at RBC Capital Markets.

After painstaking talks late Wednesday and early Thursday French President Nicolas Sarkozy eventually announced that Athens' bondholders had agreed to take a 50 percent cut on the amount of money they were owed.

Their agreement completed the final segment of a deal that will also see banks recapitalise in order to withstand the huge losses.

The Brussels talks also saw the European Financial Stability Facility (EFSF) bailout fund, which aims to protect other economies such as Italy and Spain, would be increased from 440 billion euros to more than one trillion euros. (AFP)