* MSCI Asia ex-Japan hits 9-mth peak, Nikkei at 7-mth high
* Dollar steady vs yen, euro hits 6-week high after China
* China official PMI survey shows growth reviving
* India HSBC Markit PMI survey shows manufacturing grew at
fastest on 5 months
* European shares expected to edge higher
By Chikako Mogi
TOKYO, Dec 3 Asian shares and the euro rose on
Monday as further signs of a stabilising Chinese economy boosted
investor risk appetite, but gains were capped by worries that an
impasse in U.S. budget talks could tip the world's largest
economy into recession.
European shares will likely track Asian shares higher, with
financial spreadbetters predicting London's FTSE 100,
Paris's CAC-40 and Frankfurt's DAX to open up
as much as 0.5 percent. A 0.2 percent rise in U.S. stock futures
also hinted at a firm Wall Street open.
The euro hit a six-week high against the dollar at $1.3048
on an upbeat Chinese manufacturing survey, and jumped
over 0.7 percent to a one-month high versus the Australian
dollar to around A$1.2528.
The pace of activity in China's vast manufacturing sector
quickened for the first time in 13 months in November, with the
final reading for the HSBC Purchasing Managers' Survey (PMI)
rising to 50.5 in November, further evidence that the economy is
reviving after seven quarters of slowing growth.
"There is growing confidence that China's economy bottomed
in July-September, with signs of firmer external demand," said
Hirokazu Yuihama, a senior strategist at Daiwa Securities.
"Sentiment is supported because the gradual recovery in
Asian economies comes against the backdrop of low interest rates
environment, which won't be changed anytime soon, so the
recovery in risk appetite is likely to extend into next year,"
Australia's sluggish retail sales, labour demand and tame
inflation raised expectations the Reserve Bank of Australia may
cut interest rates at its meeting on Tuesday, lifting local
shares 0.57 percent to a five-week high earlier.
Japan's Nikkei stock average added 0.5 percent after
reaching a fresh seven-month high earlier.
MSCI's broadest index of Asia-Pacific shares outside Japan
was up 0.1 percent after climbing as much as 0.4
percent earlier to a fresh nine-month high.
Hong Kong shares eased 0.2 percent after reaching
intra-day highs on the year earlier. Shanghai shares
fell 0.3 percent, approaching their lowest in nearly four years
hit last week. Indian shares earlier rose to 19-month
highs but gave up gains to inch down 0.3 percent.
The HSBC manufacturing Purchasing Managers' Index (PMI)
showed India's manufacturing grew at its fastest
pace in five months in November, boosted by strong export orders
and a surge in output.
"The storm might have abated a little, but the outlook for
equities in 2013 remains choppy," said HSBC's head of global
equity strategy, Garry Evans in a research note.
"We conclude, however, that the global stocks will make
modest gains in 2013, thanks to a combination of central bank
action, earnings growth of about 10 percent, and some further
rerating as investors slowly regain confidence in equities."
ANXIETY GAUGE MIXED
Oil prices were underpinned by the firm Chinese data,
tensions in the Middle East, involving Israel and Palestine,
political unrest in Egypt and the conflict in Syria.
U.S. crude futures rose 0.3 percent to $89.14 a
barrel and Brent added 0.4 percent to $111.63, while
London copper gained 0.3 percent to $8,014.75 a tonne.
Investors will now look at U.S. and European manufacturing
reports due later in the session for clues about the global
Uncertainty over whether Washington can avert the "fiscal
cliff", $600 billion worth of tax increases and spending cuts
that will be automatically triggered in early 2013 unless
Democrats and Republicans agree how to cut the deficit, kept
That uncertainty underpinned gold's appeal as a safe-haven
as spot gold edged up 0.3 percent to $1,719.34 an ounce.
"People are more cautious because there is no clear sign
when the fiscal cliff will be solved," said Brian Lan, Managing
Director of GoldSilver Central Pte in Singapore.
The Euro STOXX 50 Volatility Index, Europe's
widely-used measure of investor risk aversion, fell on Friday to
lows unseen since mid-2007, while the CBOE Volatility Index
, which reflects anxiety in the Standard & Poor's 500
index, jumped 5.4 percent.
The euro's limited drop on Friday after Moody's cut the
credit ratings on the European Stability Mechanism and the
European Financial Stability Fund, may hint at its resilience.
Later on Monday, ahead of a meeting of euro zone finance
ministers, Greece plans to unveil details of a bond buy-back
crucial to efforts by foreign lenders to trim the country's
ballooning debt, hoping the terms will draw enough investors and
unblock vital aid.
The dollar was down 0.1 percent against the yen at 82.26
, but not far from a 7-1/2-month high of 82.84 yen touched
on Nov. 22.
Currency speculators in the latest week boosted short yen
positions to the highest in more than five years, on
expecation's that an election on Dec. 16 will usher in a new
government that will press the central bank to aggressively ease
Defying rising equities, Asian credit markets were subdued,
with the spreads on the iTraxx Asia ex-Japan investment-grade
index little changed from Friday.