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Asia stocks largely unchanged, yen resumes fall

Asia stocks largely unchanged, yen resumes fall
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First Published: Wed, Apr 13 2011. 10 08 AM IST
Updated: Wed, Apr 13 2011. 10 08 AM IST
Singapore: Asian stocks were nearly unchanged on Wednesday, as profit taking in resource-related shares was offset by gains in technology shares.
The yen fell as some investors looked to rebuild bets against the low-yielding currency, suggesting appetite for riskier assets could soon return.
Brent oil prices edged above $121 a barrel, up on short-covering after losing 4% in two sessions, despite warnings that a price surge could curb demand.
The pullback in commodity prices made investors cut exposure to risky assets such as emerging market stocks and currencies that have had steep gains recently such as the Australian dollar.
After such a big shakeout in positioning overnight, traders and investors were reluctant to dive back into markets until a clear incentive to take more risk surfaces.
Tokyo’s Nikkei was up 0.3% while South Korea’s Kospi rose 0.2% on a day commodity and energy stocks weakened across Asia, taking a cue from the widespread decline in commodity prices overnight.
“Investors seem to remain uncertain about what to buy as they are not sure how pessimistic or optimistic companies will be about their forecasts after the quake,” said Yumi Nishimura, a senior market analyst at Daiwa Securities.
The MSCI index of Asia Pacific shares outside Japan was up 0.1% in choppy trade. The the energy and material sector indices recorded the biggest losses.
The yen slipped 0.4% against the dollar and euro as some analysts said its gains this week were because of stretched positioning and may be an opportunity for investors to extend their short positions.
“At this stage, we don’t see reason to believe that the early week price action marks the start of a broader ‘risk-off´ move ... This latest dip is an opportunity to reset or extend longs (against the yen),” analysts at BNP Paribas wrote in a client note.
Brent crude for May, which expires on Thursday, rose 0.4% to $121.35 a barrel. US May crude fell 0.2% to $106.11.
Gold bounced higher on Wednesday after posting its biggest fall in a month in the previous session, but declines in bullion and silver ETF holdings suggest investors are nervous following a second bearish forecast from commodity bull Goldman Sachs.
Spot gold added 44 cents to $1,454.39 an ounce after falling as low as $1,443.49 an ounce on Tuesday. Gold hit a record around $1,476 an ounce on Monday on the prospect of more declines in the dollar.
The world’s largest gold-backed exchange-traded fund, SPDR Gold Trust , said its holdings slipped to 1,216.299 tonnes by April 12 from 1,217.209 tonnes on April 7.
US Treasuries dipped as Asian investors took advantage of their hefty gains overnight to offload some of their holdings, but market players say prices could climb further if US retail sales data due later in the day shows inflation is crimping consumer spending.
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First Published: Wed, Apr 13 2011. 10 08 AM IST
More Topics: Markets | Global | Economy | Asia | Nikkei |