* China stimulus hopes underpin commodities, Aussie dollar
* European shares seen rising, DAX seen up 0.4 pct
By Hideyuki Sano
TOKYO, March 26 Asian shares raced to two-week
highs on Wednesday, with investor confidence getting a
much-needed boost from upbeat U.S. data and diminishing concerns
over the Ukraine/Crimea crisis.
MSCI's broadest index of Asia-Pacific shares outside Japan
rose 1.1 percent to its highest level since
March 11, while Japan's Nikkei ticked up 0.3 percent.
European shares are expected to follow suit, with both
Germany's DAX and France's CAC seen rising 0.4
U.S. consumer confidence rose more than expected in March,
to its highest level since January 2008 and U.S. house prices
increased solidly in January.
The two reports were the latest in a string of positive
reads on the U.S. economy, adding more credence to the view that
softness earlier this year was related to bad weather and not
inherent economic weakness.
The upbeat data helped Wall Street shares rebound after a
two-day decline, with the Standard & Poor's 500 Index
gaining 0.4 percent.
Risk appetite also got a lift from perceptions that
geopolitical tensions over Ukraine are easing after a meeting of
Western leaders ended with little more than fist-shaking at
U.S. President Barack Obama and his allies agreed to hold
off on more damaging economic sanctions unless Moscow goes
beyond the seizure of Crimea.
The news that Moscow's and Kiev's foreign ministers had held
an impromptu first meeting also led investors to believe the
crisis triggered by Russia's annexation of Crimea is not heading
into a wider armed conflict.
"The markets were worried that Russia might invade the
southern or eastern part of Ukraine after Crimea. But the
chances of that happening seems to be slim now, reducing
investors' risk aversion," said Kyosuke Suzuki, director of
forex at Societe Generale.
Investor relief was palpable in Russia, where the rouble
firmed to pre-Crimea crisis levels.
The rouble rose about 1.5 percent on Tuesday against the
dollar-euro basket, its biggest gain in 1-1/2 years, to 41.68 to
the basket, hitting a one-month high.
The MSCI emerging equities index also rose to a
two-week high, with Brazilian shares tapping five-week
highs despite a downgrade of Brazil's credit rating by U.S.
rating firm Standard & Poor's.
Indian shares hit a record high and the rupee also
rose to an eight-month high on hopes of more foreign
Hopes that Beijing will take steps to bolster its sagging
economy underpinned Chinese shares and many markets leveraged to
the Asian giant. Brazil and Australia were among the
beneficiaries, as well as a host of commodities.
Following a recent run of disappointing Chinese data this
year, many economists now expect China's growth to fall short of
the government's target of 7.5 percent this year in the absence
of effective support measures.
"Investors are betting on stimulus because Chinese
authorities have done everything they could to achieve the
target in the past," said Sho Aoyama, senior market analyst at
Mainland Chinese shares dipped slightly but still
held not far from one-month high, even as rumour of insolvency
led to a run on small banks amid growing anxiety about potential
insolvencies in China as regulators signal greater tolerance for
London copper futures rose to a two-week high of
$6,623.75 per tonne on Tuesday, while commodities that had been
battered earlier this month -- including iron ore and steel --
also rebounded from their lows.
The Australian dollar hit four-month high of $0.9200
. Other major currencies were stuck in well-worn ranges,
with the euro fetching $1.3816 and the yen changing hands
at 102.32 yen to the dollar.
Meanwhile, precious metals lost some of their allure as
concerns over Ukraine eased and as U.S. short-term rates have
Gold hit a five-week low of $1,305.59 per ounce on Tuesday
and last stood at $1,313.20 while silver dropped to
seven-week low of $19.78 per ounce.
(Editing by Shri Navaratnam and Eric Meijer)