* MSCI Asia ex-Japan up 0.5 pct, Nikkei recovers
* Euro inches up, yen off 9-month lows vs dollar
* Oil extends losses after sell-off on Monday
* European shares likely to edge higher
By Chikako Mogi
TOKYO, Feb 28 Asian shares and the euro
edged higher on Tuesday as markets waited for a second liquidity
injection from the European Central Bank to gauge risk appetite
that has been somewhat dented by worries over high oil prices.
Brent crude oil futures slipped, extending losses after
snapping a week-long rally on Monday, but concerns over supply
from the Middle East helped stem the slide.
MSCI's broadest index of Asia Pacific shares outside Japan
edged up 0.5 percent, with the defensive
healthcare sector outperforming. The pan-Asia
index has risen 13 percent this year, while Japanese equities
have gained 14 percent.
Financial spreadbetters expected major European markets
to open 0.1 to 0.5 percent higher.
"Markets have risen too rapidly and may consolidate from
time to time, (with people) looking to buy after prices fall.
But underlying sentiment is gradually firming, as people believe
they've seen the worst." said Xiao Minjie, chief economist at
FuNNeX Asset Management in Tokyo.
He said that while ample liquidity supplied by global
central banks was pushing crude prices higher, demand in Europe
and China was unlikely to pick up strongly enough to lift oil
prices near all-time peaks of around $150 that were scaled in
Looking to the ECB's longer term refinancing operation on
Wednesday, analysts were focusing on the size of the gross
allotment as well as net new liquidity. A poll showed 30 euro
money market traders expect the ECB to allot 500 billion euros,
with forecasts ranging from 200 billion to 750 billion euros.
The ECB's first liquidity injection into the system in late
December helped stabilise markets by removing concerns about a
liquidity crunch in Europe.
"Although the issues surrounding Greek PSI (private sector
involvement) and additional financial resources for Europe will
likely dominate headlines, we believe that the upcoming LTRO and
behaviour of energy prices are more important for market
sentiment," said Barclays Capital analysts.
NIKKEI ERASES LOSSES
Among equities in Asia, Japan's Nikkei average
erased morning losses to climb 0.9 percent to hit a fresh
seven-month closing high, helped by expectations of buying from
several investment trusts due to be launched on Wednesday.
Japanese chip-related stocks lost ground after chipmaker
Elpida Memory Inc filed for protection from creditors
on Monday but Elpida's woes helped lift Korean equities,
boosting shares in rivals Hynix Semiconductor and
The euro edged up 0.2 percent to $1.3431, off a near
three-month high of $1.3487 reached on Friday. The dollar eased
0.3 percent against the yen at 80.33 yen, retreating from
a nine-month high of 81.66 yen hit on Monday.
Market reaction was muted after Standard & Poor's on Monday
cut Greece long-term ratings to 'selective default'.
Greece set a March 8 deadline for private holders of its
bonds to participate in an unprecedented bond swap. The German
parliament endorsed a recently approved second bailout for
Greece with a comfortable victory.
Brent fell 0.5 percent on Tuesday to $123.55 a
barrel, moving further away from a near 10-month peak above $125
a barrel on Friday. U.S. crude fell 0.5 percent to
$108.05 a barrel. Brent has risen about 15 percent this year,
supported in part by worries over supplies amid tensions between
the West and Iran over Tehran's nuclear programme.
"People were worried about the quick move in prices - they
just sped up too fast," said Tetsu Emori, a fund manager with
Astramax Co in Tokyo.
"We may see some more correction and participants
repositioning themselves before prices start to rise again."
London copper edged down 0.2 percent to $8,516 a
tonne as slow demand from top consumer China spurred caution,
but fresh signs of a U.S. economy on the mend helped limit
losses. Copper has gained nearly 12 percent this year.
Data on Monday showed contracts for U.S. home resales rose
to a near two-year high in January, boosting optimism that the
housing market may be recovering.
Asian credit markets were subdued, with the spreads on the
iTraxx Asia ex-Japan investment-grade index barely
changed from Monday.