* Stocks notch up modest gains, holidays crimp trade
* Major currencies locked in tight ranges, gold firm on
* Data diary mostly empty, Australia central bank holds
By Wayne Cole
SYDNEY, May 6 Asian share markets shuffled
higher on Tuesday after promising U.S. economic news helped Wall
Street to a firmer finish, though activity was again light with
Tokyo still on holiday.
Australia's main index led the way with a gain of
0.5 percent, while MSCI's broadest index of Asia-Pacific shares
outside Japan added 0.16 percent.
Markets in Seoul and Hong Kong are also off on Tuesday to
celebrate the Buddha's birthday.
Sentiment did get a fillip after the Institute for Supply
Management's U.S. services sector index rose to 55.2 in April,
the fastest pace in eight months and easily topping forecasts.
A reading above 50 indicates expansion.
The data added to evidence that the U.S. economy is emerging
from a particularly harsh winter-induced slowdown and provided a
welcome offset to worries about China.
"The U.S. is showing signs of recovering from particularly
slow momentum in Q1, driven to a significant extent by adverse
weather effects, and the euro area remains on a stable, gradual
upward trajectory," noted analysts at Barclays.
"In Japan, the sales tax hike frontloading and payback,
which began last month, were largely in line with expectations."
The better U.S. news helped Wall Street recover early
losses. The Dow closed up 0.11 percent, while the S&P 500
gained 0.19 percent and the Nasdaq 0.34 percent.
MSCI's all-country world stock index traded
flat, while the euro zone's blue-chip Euro STOXX 50 index
pared some losses to close 0.21 percent lower.
Bonds took the opposite tack with Treasuries surrendering
some of the gains made last week. Yields on 10-year paper
lurched up to 2.61 percent, having been as low as
The U.S. Treasury auctions three-, 10- and 30-year debt this
week which will be a useful litmus test of investor demand.
In currency markets, trading was subdued as holidays in
London and Tokyo sapped liquidity. The dollar index was
steady at 79.501, having drifted between 79.433 and 79.527 on
The euro stood at $1.3875, having hugged a tight
$1.3864-$1.3887 range. Against the yen, the greenback was little
changed at 102.15 as was the euro at 141.71.
There was little in the way of major economic data scheduled
for Asia on Tuesday, leaving attention on the outcome of
Australia's central bank policy meeting at 0430 GMT.
The Reserve Bank of Australia (RBA) is considered almost
certain to leave its cash rate unchanged at 2.5 percent and
maintain a steady policy outlook.
Many, however, will be looking for any commentary on the
level of the Australian dollar, which has remained stubbornly
high. The Aussie was last at $0.9278, holding above
support at $0.9250.
In commodities, gold was firm at $1,310.71 an ounce
after touching three-week highs, partly due to the simmering
tensions in Ukraine.
Pro-Russian rebels shot down a Ukrainian helicopter in
fierce fighting near the eastern town of Slaviansk on Monday,
and Kiev drafted police special forces to the southwestern port
of Odessa to halt a feared spread of rebellion.
Loss of control of Odessa would be a huge economic and
political blow for Ukraine, a country the size of France that
borders several NATO countries and aspires to join the military
alliance, a primary source of concern for the Kremlin
Oil prices extended their recent decline. Brent crude for
June delivery was off 8 cents at $107.64 a barrel, while
U.S. crude eased 2 cents to $99.46 a barrel.
(Editing by Shri Navaratnam)