Asian shares gain, dollar near year lows

Asian shares gain, dollar near year lows
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First Published: Wed, Jun 03 2009. 09 06 PM IST
Updated: Wed, Jun 03 2009. 09 06 PM IST
Tokyo: Asian shares rose to eight-month highs on Wednesday, as the US home sales data added to optimism that the global economy is through the worst, while the dollar struggled off its latest set of lows for the year.
Oil held around $68 (Rs3,182) in Asian trade ahead of weekly US inventory data and as investors grew more cautious ahead of the $70 mark.
Japan’s benchmark Nikkei stock average rose 0.4%, buoyed by smelters and glass makers such as Asahi Glass Co. after brokerage upgrades citing signs of hope for the global economy.
The MSCI index of Asian shares excluding Japan rose 0.8% and scored its latest eight-month peak.
The index has risen at least 60% in the past three months as investor confidence has grown that the global downturn has slowed, with latest evidence coming from a surprise surge in the US pending homes sales. The Nikkei has risen almost 40% in the same period.
“There’s been enough improvement in the global economy to say that we’ve put the worst-case scenario behind us,” said Yutaka Miura, senior technical analyst at Mizuho Securities Co.
Analysts remained cautious about the strength of the economic foundations for the three-month long rally in shares and higher-yielding currencies and markets were awaiting US data later that includes factory orders, a non-manufacturing index and a private employment report.
“We need still more proof that things are really improving,” Miura said.
South Korean shares edged up 0.1%, helped by shipbuilders, but KB Financial Group, parent of Kookmin Bank, fell after it said it might sell new shares to raise capital.
China rose 2%, while Singapore climbed 0.3% and Taiwan fell 0.8%.
The dollar has been the prime loser in the risk-taking rally that has stoked multi-month peaks in major currencies as investors gained the confidence to branch out into markets other than safe-haven dollar-based ones.
The greenback hit its weakest level this year against a basket of six major currencies on Wednesday but gained following a report that Asian central banks would likely keep buying US treasuries even if the US’ sovereign credit rating was downgraded.
The dollar gained to around 95.8 yen and reversed losses against the pound, trading around $1.6560.
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First Published: Wed, Jun 03 2009. 09 06 PM IST
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