Wednesday, 8 May 2013

Asian shares capped but Nikkei soars on U.S. growth hopes

By Chikako Mogi

TOKYO (Reuters) - Asian shares were capped on Tuesday by caution over weak global growth data, but renewed hopes for a steady U.S. recovery propelled Japanese equities to a near five-year peak.

European stock markets were seen tracking Asian shares lower, with financial spreadbetters predicting London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX would open flat to down as much as 0.3 percent.

U.S. stock futures were down 0.1 percent, suggesting a softer Wall Street open after the Standard & Poor's 500 Index closed at a record high overnight.

The boost to riskier assets after a stronger-than-expected U.S. jobs data on Friday has given in to profit taking, reflecting a lack of investor confidence in broader economic prospects.

"There is some profit-taking coming in after the sharp rise in prices we saw in the recent days," said Tetsu Emori, a commodities sales manager at Astmax Investments in Tokyo, referring to oil prices.

"The current fundamentals are very weak, with China slowing down and with U.S. demand not so strong."

MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.1 percent, struggling to gain after hitting a 2-1/2-month high on Monday when market sentiment was buoyed by the U.S. monthly employment report.

The main focus for Asia was the Reserve Bank of Australia's policy meeting, at which the bank decided to lower its cash rate by 25 basis points to a record low 2.75 percent.

Markets had priced in a 50-50 chance of a rate cut, and the decision sent the Australian dollar down to a two-month low of $1.0810 but helped Australian shares trim earlier losses. Australian shares were last down 0.2 percent.

The next key event for the region will be a slew of April data from the world's second-largest economy, China, starting with trade on Wednesday, inflation on Thursday and money supply and loan growth expected from Friday.

"Post-nonfarm payroll euphoria has proved short lived and despite U.S. markets grinding higher overnight, markets are now on the look out for their next reason to rally," Jonathan Sudaria, a trader at Capital Spreads, said in a note to clients.

Hong Kong and China shares lingered at multi-week highs in choppy trade as investors rotated out of recent outperformers ahead of upcoming Chinese data.

South Korean shares fell 0.3 percent, led by automakers, and weighed by caution ahead of Thursday's policy decision by the Bank of Korea as well as a weaker yen.

Japan's Nikkei stock average, however, soared 3.7 percent to rise above 14,000 for the first time since June 2008, helped by signs of resilience in the United States, Japan's top export market.

Japanese markets were closed on Friday and on Monday for holidays.

COMMODITIES MIXED

London copper was up 0.3 percent at $7,290.25 a tonne, after earlier hitting a three-week high of $7,374 on signs the U.S. economy was in a better shape than earlier thought and hopes demand from top consumer China may pick up.

U.S. crude futures slid 0.6 percent to $95.56 a barrel and Brent fell 0.4 percent at $105.06.

Spot gold eased 0.3 percent to $1,464.96 an ounce, weighed by continuing ouflows in holdings at SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, which hit their lowest since August 2009.

"I think sentiment is quite mixed. Physical demand supports gold but you can see some liquidation in the market," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.

"Gold in the medium-term is still a little bit bearish. You can see holdings on SPDR are still down about 3 to 4 tonnes every day."

The euro inched up 0.1 percent to $1.3087, after it fell on Monday when European Central Bank President Mario Draghi said the bank, which cut interest rates last week, is watching economic data and is ready to take further action if needed.

The dollar was off 0.2 percent against the yen at 99.16, possibly readying to test the symbolic 100 yen level again. The dollar hit a four-year high of 99.95 yen on April 11.

While the U.S. nonfarm payrolls data caught traders off guard, with the unemployment rate falling to its lowest since December 2008, other economic indicators were gloomier, including purchasing managers indexes from the euro zone and China.

(Additional reporting by Lewa Pardomuan and Manash Goswami in Singapore; Editing by Eric Meijer & Kim Coghill)

Source: http://news.yahoo.com/asian-shares-steady-higher-wall-street-002742044.html

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