GLOBAL MARKETS-Asian shares take heart from upbeat data

Fri Aug 23, 2013 2:37am EDT

* MSCI Asia index snaps losing streak but still down on week
    * Nikkei surges as yen falls to more than two-week low vs
dlr
    * Upbeat manufacturing data hints at global recovery
    * Concerns remain about impact of Fed stimulus withdrawal


    By Lisa Twaronite
    TOKYO, Aug 23 (Reuters) - Asian shares marked an upbeat end
to a mostly grim week on Friday as economic data suggesting the
global economy is improving took the edge off persistent fears
that the U.S. Federal Reserve will start withdrawing stimulus
next month.  
    European stocks were seen rising, with financial
spreadbetters expecting Britain's FTSE 100 to open
around 18 points higher, or up 0.3 percent; Germany's DAX
 to open 32 points higher, or up 0.4 percent; and
France's CAC 40 to open 12 points higher, or up 0.3
percent.
    MSCI's broadest index of Asia-Pacific shares outside Japan
 finished up 0.6 percent, bouncing decisively off
a six-week low touched on Thursday and snapping a six-session
losing streak, its longest since March 2012. Still, it looked
set to end down 3.1 percent for the week, its worst in nine
weeks. 
    Japan's Nikkei stock average outperformed, surging
2.2 percent, as a weaker yen gave a tailwind to exporters'
shares. The Nikkei eked out a weekly gain of 0.1 percent, up for
the second straight week, although market participants said
Friday's rally was not necessarily a harbinger of a major shift
in sentiment.
    "It doesn't look like investors are going long. It's merely
short-covering, but compared to a few days ago when fears about
emerging countries weighed, we are finally seeing bright signs
in the world economy," said Isao Kubo, equity strategist at
Nissay Asset Management in Tokyo.   
    Asian gains tracked those in overseas markets in the
previous session. European shares registered their best session
since early this month and all three U.S. indexes ended higher
despite a system glitch that stopped trading of more than 3,000
Nasdaq-listed shares for almost three hours.
    Purchasing managers surveys showed better-than-expected
growth in the euro zone, a Chinese manufacturing rebound and
U.S. manufacturing activity rising to a five-month high this
month. 
    U.S. Labor Department data also showed new claims for
jobless benefits held near a six-year low last week, adding to
signs that the U.S. labour market is stabilising.
 
    But the brighter U.S. data had a dark underbelly that some
strategists said would limit market gains, as it reinforced
expectations that the economy is strong enough for the Fed to
begin tapering its quantitative easing (QE) as early as next
month. That could draw more capital out of emerging countries,
whose markets have felt the pinch in recent sessions. 
    Singapore Finance Minister Tharman Shanmugaratnam said on
Friday that it would not be in anyone's interest for very low
global interest rates to continue indefinitely, as this leads to
financial imbalances.    
    "The tapering of QE and tightening of U.S. monetary policy,
when it eventually occurs, will not be a bad thing for the
region's economies," Tharman told a banking conference in
Singapore.
    Some Asian investors are betting that North Asian currencies
such as the South Korean won and the Taiwan dollar will fare
better than their Southeast Asian counterparts as the Fed pares
its stimulus. 
    The Korea Composite Stock Price Index (KOSPI) rose
1.1 percent, paring its weekly loss to 2.6 percent, as some
fears about the impact of Fed policy on emerging markets eased. 
    "The market is responding well to the upbeat U.S. and
European data, while concerns about India and Indonesia have
eased," said Samsung Securities analyst Lim Soo-gyun.
 
    
    DOLLAR EDGES HIGHER
    The dollar rose about 0.2 percent against a basket of
currencies to 81.626. On Thursday, it broke through initial
resistance at 81.604, its 200-day moving average, to hit a
one-week peak of 81.719.
    Iydollar rose 0.4 percent against the Japanese currency  to
99.09 yen after hitting 99.12 yen earlier on the EBS
trading platform, its highest since Aug. 5, while the euro
 slipped about 0.1 percent to $1.3338.
    In commodities trading, copper prices dropped 0.3
percent to $7,299 a tonne, but were supported by the Chinese
manufacturing data that suggested demand from the world's
second-biggest economy and top metals consumer could pick up.  
    Gold slipped slightly to $1,375.44 per ounce, headed
for a small loss for the week. The precious metal was also
buoyed by the China PMI but was at the same time pressured by
upbeat global economic data and expectations that the U.S.
Federal Reserve will soon taper its stimulus.
    Brent crude prices rose 0.2 percent to $110.06 a
barrel. Rising political tensions in the Middle East and North
Africa have bolstered oil prices this week, even as reports of
some Libyan ports readying for exports eased supply concerns.
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.