GLOBAL MARKETS-Asian shares mostly rise as Syria action on hold

Fri Aug 30, 2013 2:31am EDT

* Nikkei gives up early gains as oil tumbles
    * Dollar remains near 3-week high on upbeat U.S. GDP data
    * Asian currencies mostly higher, set for big monthly losses


    By Lisa Twaronite
    TOKYO, Aug 30 (Reuters) - Asian stocks rose and oil prices
tumbled as a possible U.S. military strike on Syria appeared
less likely, while the dollar remained not far from a three-week
high against a basket of currencies after upbeat U.S. growth
data.
    While most regional emerging market currencies scratched out
gains on Friday, the damage for the month was extensive as
investors positioned for the U.S. Federal Reserve to begin
tapering its asset-buying stimulus as early as next month.    
    European markets could feel the pinch of weaker heavyweight
energy shares, but are expected to be little-changed at the open
after rallying on Thursday. 
    Financial spreadbetters expect Britain's FTSE 100 to
open down 6 points, to up 2 points; Germany's DAX to
open down 2 to 11 points, or 0.1 percent lower; and France's CAC
40 to open down 3 points to flat.
    U.S. intervention in Syria in response to what Western
governments believe was President Bashar al-Assad's use of
chemical weapons looked set to be delayed at least until United
Nations investigators report back after leaving Syria on
Saturday. 
    On Thursday, Britain's parliament rejected British
participation in any military action against Syria, while China
said there should be no rush to force U.N. Security Council
action against Syria until the U.N. inspectors' investigation is
complete.
    But U.S. Defense Secretary Chuck Hagel said on Friday that
America will continue to seek out an international coalition to
act together on Syria. 
    The dollar index was slightly lower at 81.916, after
rising as high as 82.067 on Thursday, its highest level since
Aug. 5. 
    U.S. data overnight showed the U.S. economy grew at a
quicker-than-expected annual pace of 2.5 percent in the second
quarter. Combined with a fall in weekly jobless claims, this
growth reinforced expectations that the Fed is gearing up to
reduce its stimulus.
    MSCI's broadest index of Asia-Pacific shares outside Japan
 finished up about 0.7 percent, managing a 0.1
percent weekly gain but a 1.3 percent monthly loss. 
    But Japan's benchmark Nikkei stock average bucked
the regional trend on Friday and gave up early gains, losing 0.5
percent and ending both the week and month with respective
losses of about 2 percent despite government data that painted a
brighter economic picture. Rising prices, falling unemployment,
higher incomes and factory activity gathering momentum pointed
to an ongoing recovery in the world's third-largest economy.
 
    Against the perceived safe-haven Japanese yen, the dollar  
shed 0.2 percent to 98.13 yen, moving back toward a
two-week low of 96.81 yen hit on trading platform EBS on
Wednesday.  
    "If investors sell emerging countries' currencies and buy
safe-haven yen, it will hurt Japan's exporters' shares, so we
may have to brace for that possibility. Concerns on Syria have
not faded completely, either," said Masanaga Kono, senior
strategist at Amundi Japan.
    The looming reduction of the Fed's quantitative easing has
taken a toll on U.S. stocks, but emerging market currencies have
borne the brunt. 
    The Indian rupee has tumbled more than 10 percent
against the dollar so far this month, which would be its largest
monthly depreciation ever if it ends around current levels,
according to Thomson Reuters data. The rupee plunged to a record
low earlier this week as policymakers scrambled for solutions.
 
    The Indonesian rupiah has lost nearly 6 percent so
far in August, which would be its biggest monthly fall since
November 2008. On Thursday, Indonesia's central bank raised its
main interest rates, the latest country forced to defend its
currency as investors pulled out funds from emerging markets in
search of safer destinations. 
    "The rate hikes are only a brief measure. Sentiment on the
rupiah is really pessimistic, given the country's current
account deficit and high inflation," said Yuna Park, a currency
and bond analyst at Dongbu Securities in Seoul.
    Brent crude prices fell 0.7 percent to $114.31 a
barrel after spiking to a six-month high on Wednesday on fears
that any foreign military action in Syria would destabilise the
Middle East, which pumps a third of the world's oil, and would
disrupt crude supply.
    Gold eased 0.1 percent to around $1,406.29 an ounce,
moving away from a 3-1/2 month high hit on Wednesday as fears
over Syria prompted a flight to safety.
    Copper prices added 0.5 percent at $7,185 a tonne,
after sliding for a third day on Thursday and reaching their
lowest price in almost three weeks due to the stronger dollar,
concerns about Syria and slightly higher inventories. But they
were still on track to mark their biggest monthly gain in nearly
a year. 
    On Wall Street on Thursday, stocks ended higher in thin
volume, taking back some lost ground after their worst daily
decline since June earlier this week. Over the past two
sessions, the Standard & Poor's 500 Index has gained
about 0.5 percent, but remains down 1.5 percent for the week.