* MSCI Asia pushes to fresh three-year high after S&P 500
rises to record
* Aussie spikes higher on stronger-than-expected inflation
* Euro wallows around 8-month low versus dollar
By Shinichi Saoshiro
TOKYO, July 23 An index of Asian shares touched
a fresh three-year high on Wednesday as some markets focused on
company earnings more than geopolitical tensions while the
Australian dollar spiked on stronger-than-expected inflation
But a cautious mood was expected to return in early European
trade, where spreadbetters predicted Britain's FTSE 100
to open 8 to 15 points lower, or down as much as 0.2 percent;
Germany's DAX to open down 20 to 22 points, or 0.2
percent lower; and France's CAC 40 to open 5 to 6 points
lower, or down 0.1 percent.
"Despite yesterday's strong rebound in Europe, we look set
to start on the back foot this morning after a slightly negative
reaction to the latest earnings announcements from Microsoft and
Apple, after the bell last night," Michael Hewson, chief market
analyst at CMC Markets, said in a note.
Apple Inc posted a smaller-than-expected 6 percent
rise in quarterly revenue, while Microsoft Corp MSFT.O said it
aims to get its loss-making Nokia phone unit to break even
within two years after it reported a 7 percent dip in quarterly
Violence continued in Gaza, but hopes rose for an easing of
tension in Ukraine after pro-Russian rebels handed the flight
recorders and victims' remains from a downed Malaysian airliner
to international authorities.
MSCI's broadest index of Asia-Pacific shares outside Japan
rose 0.5 percent after earlier pushing to a
three-year peak, lifted after the S&P 500 hit a new high
overnight as risk markets turned their attention to positive
corporate earnings and economic data.
In contrast, Japan's Nikkei stock average closed
down 0.1 percent as the Tokyo markets kept their focus on
tensions in Gaza and the Middle East.
In currencies, the Australian dollar, already on a bullish
footing after the country's central bank chief on Tuesday chose
not to talk down the currency, added about 0.4 percent to buy
$0.9432. It spiked to a nearly two-week high of $0.9439
on surprisingly high core inflation figures that dented rate cut
"We think that the speculation regarding a near-term rate
cut that we've seen over the past four to six weeks is likely to
be dialed back to a certain extent," said Tom Kennedy, economist
at JP Morgan in Sydney.
The euro stood little changed at $1.3467, after
ticking down to a fresh eight-month trough of $1.3458 earlier in
The weaker euro dovetailed with expectations for the
European Central Bank to ease policy further with a gradual
widening of interest rate differentials favouring the U.S. over
Europe seen unfolding.
Still, market participants did not see a clear, specific
trigger for the latest plunge.
"The only explanation for the sell-off in EUR/USD is a
technical one. The currency pair has been in a downtrend and
hovering near 1.35 for the past few days with speculators
itching to test this key support level," Kathy Lien, managing
director of FX strategy for BK Asset Management, wrote in a note
"In the long run, we believe EUR/USD should be trading
comfortably below 1.35, but not until there is significant
upside momentum in U.S. yields," she said.
U.S. Treasury yields fell overnight after benign U.S.
inflation data suggested less pressure on the Federal Reserve to
raise interest rates sooner than expected.
The dollar was nearly flat at 101.42 yen, having
pulled back from the week's low of 101.19 hit on Monday as
demand for the safe-haven Japanese currency diminished.
In commodities, gold held steady after falling on Tuesday as
tensions over the Malaysian airliner downed over Ukraine eased.
Spot gold was little changed at $1,305.70 an ounce
after falling as low as $1,301 overnight. It had climbed to as
high as $1,324 late last week when the Malaysian airliner was
U.S. crude dropped about 0.3 percent to around $102 a
barrel, falling for a second consecutive session as oil supplies
were unaffected by continuing violence and tension in Iraq,
Ukraine and Gaza.
(Additional reporting by Lisa Twaronite in Tokyo and Wayne Cole
in Sydney; Editing by Eric Meijer and Richard Borsuk)