* Spreadbetters see European bourses opening lower
* Crude near 9-month highs on fears of impact of Iraqi
* Nikkei skids to two-week closing low
* Fed meeting, China house price data in focus this week
By Lisa Twaronite
TOKYO, June 16 Most Asian share markets
struggled on Monday, as crude extended gains and tested
nine-month highs on fears the insurgency in Iraq could spread -
disrupting oil exports.
The gloom was seen overshadowing European bourses as well,
with financial spreadbetters predicting Britain's FTSE 100
to open down around 0.2 percent, Germany's DAX
off 0.3 percent, and France's CAC 40 to open 0.4 percent
"The one factor in play at the moment is an escalation of
Iraq concerns and how this is pushing energy prices higher," IG
Market Strategist Stan Shamu said in a note to clients.
Sunni insurgents seized a mainly ethnic Turkmen city in
northwestern Iraq on Sunday, while the United States boosted
security for its diplomatic staff in Baghdad and said some
personnel had evacuated from the embassy.
Brent rose about 0.6 percent to $113.16 per barrel,
after touching $114.69 on Friday, its highest since September.
Brent added more than $4 last week. U.S. crude climbed
about 0.4 percent to $107.37, approaching Friday's nine-month
high of $107.68.
The rising oil prices and shrinking risk appetite weighed on
emerging Asian currencies, with the rupee hitting a
five-week low and the rupiah and the South Korean won
Gold hit its highest in nearly three weeks as the
Iraqi crisis supported the metal's safe-haven appeal, rising
about 0.1 percent to $1,277.80 an ounce after hitting $1,278.74
earlier in the session - the highest since late May.
MSCI's broadest index of Asia-Pacific shares outside Japan
was down for most of the session, moving away
from a three-year high hit a week ago, but wavered in and out of
positive territory in late afternoon trading.
China's Shanghai Composite Index added 0.7 percent.
Some publicly listed Chinese banks qualified for a reduction in
reserve requirements announced by the central bank last week,
bankers told Reuters on Monday.
Japan's Nikkei stock average ended down 1.1 percent
at a two-week low, dragged lower by fears of higher materials
"Investors aren't expecting material costs will rise soon
and have an immediate impact on companies' profits, but they are
wary of these risks in the longer run," said Hikaru Sato, a
senior technical analyst at Daiwa Securities. "The geopolitical
concerns are lowering risk appetite."
Wall Street stocks edged higher on Friday, but ended the
week with modest losses.
The dollar slipped about 0.3 percent to 101.76 yen,
moving back toward a two-week low of 101.60 yen marked on
Thursday. The euro shed 0.1 percent to buy 137.90 yen
Against the greenback, the euro added about 0.1
percent on the day to $1.3551.
The dollar got little help from U.S. Treasury yields, which
edged down as prices rose in response to waning risk appetite.
The yield on benchmark 10-year Treasuries stood at
2.587 percent, down from Friday's U.S. close of 2.604 percent.
For further clues on the direction of U.S. rates, investors
will be focusing on the U.S. Federal Reserve this week as it
concludes its policy meeting on Wednesday. Markets will be
watching for any signals on when the U.S. central bank might
begin hiking interest rates.
"Key points are if Fed Chair (Janet) Yellen upgrades her
view on the economic view in light of recent economic indicators
and if the central bank raises its yield forecast, which would
reignite expectations for earlier rate hikes," said Junichi
Ishikawa, market strategist at IG Securities in Tokyo.
"Whether geopolitical risks have any currency impact depends
on how the situation in Iraq and Ukraine impacts the equity
markets, but so far their reaction appears limited," he said.
Other data in focus this week is China's latest report on
foreign direct investment on Tuesday, and then house price
figures on Wednesday. Investors would be concerned if the latter
were to show a slowdown in property price growth, raising
questions about the outlook for that sector especially given the
broader weakness in the economy.
(Additional reporting by Ayai Tomisawa and Shinichi Saoshiro;
Editing by Eric Meijer & Shri Navaratnam)