* Asian shares shaky after falls on Wall St, European
* Euro runs into profit-taking, while yen gets a lift
* Oil prices fall sharply on supply outlook
By Wayne Cole
SYDNEY, Jan 3 Asian markets were on the
defensive on Friday after a sudden reversal in some very
popular, and thus crowded, trades sparked a bout of global risk
The net result was a pullback in the euro, sterling, and
stocks and a bounce for the yen, gold and bonds. Oil prices also
fell sharply, though for purely idiosyncratic reasons.
The various moves seemed to pay no regard to the news flow,
which was generally upbeat with global manufacturing ending 2013
on a strong note as the United States, Japan and Germany all saw
demand pick up, although there was some moderation in China.
There is little in the way of fresh data due on Friday,
though a speech by Federal Reserve Chairman Ben Bernanke will
bear watching given the markets' sensitivity to anything to do
On Wall Street, the Dow fell 0.82 percent on Thursday
and the S&P 500 lost 0.89 percent. MSCI's 45-country
share index slipped 1 percent, while U.S.
dollar-denominated Nikkei futures fell 2.1 percent.
Early Friday, MSCI's broadest index of Asia-Pacific shares
outside Japan was down 0.2 percent, with the
Australian market off 0.5 percent.
Anxious eyes were fixed on Thailand after the stock market
sank over 5 percent on Thursday amid deepening political
uncertainty. The Thai currency also took a bath, hitting its
lowest since early 2010 at 32.95 per dollar.
Shares in South Korea also made a shaky start to the
year, though there the problem was one of a strong won and a
weak yen undermining the competitiveness of the country's huge
Samsung Electronics Co Ltd alone fell more than
5 percent on Thursday to its lowest in over four months.
In currencies, the euro took a spill as speculators booked
profits on long positions after a strong 2013. The single
currency had dropped back a full cent to $1.3664 and
briefly touched a two-week low of $1.3628.
The same forces gripped sterling, another strong performer
in recent months. The pound peeled away to $1.6451 from a
28-month peak of $1.6605.
That in turn lifted the U.S. dollar index, a gauge of the
greenback's value against six major currencies, by the most in
five months. Early Friday, the index was up at 80.580
from a low of 80.083 the day before.
Going the other way, the yen enjoyed a short-covering
bounce. Borrowing in yen to buy higher yielding assets has been
a vastly popular trade, leaving the market vulnerable to sudden,
if usually brief, reversals.
In this case the dollar came off to 104.79 yen after
being as high as 105.44, its strongest level since October 2008.
Likewise, the euro retreated to 143.26 yen from a peak
of 145.12 on Thursday.
The short-covering theme extended to U.S. Treasury debt,
which has been under pressure for pretty much all of the past
two months. Yields on the 10-year note dipped to 2.99 percent
from a top of 3.04 percent, which had been the highest sine
Gold was another beaten-down asset to get a reprieve. The
metal swung up to $1,224.00 having been as low as
$1,183.80 early in the week.
Three-month copper touched its highest level in
seven months encouraged by the improving background for global
Oil prices went the other way as Libya prepared to restart a
major oilfield and on speculation of a sharp rise in crude
stockpiles in the United States.
Brent crude lost $2.98 on Thursday to $107.82 a
barrel. U.S. crude was at $95.45 having shed almost $5 on