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Asia stocks near 1-month high; euro dips

Asia stocks near 1-month high; euro dips
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First Published: Tue, Sep 07 2010. 10 25 AM IST
Updated: Tue, Sep 07 2010. 10 25 AM IST
Singapore: Asian stocks hovered near one-month highs on Tuesday as investors awaited Chinese data, while the euro took a hit after a newspaper report rekindled fears about the weakness of European banks.
The MSCI Asian stock index outside Japan marked time after gaining 5 percent so far this month, while Japan’s Nikkei average rebounded after briefly losing 0.8% due to profit-taking.
Risk-taking has been supported by stronger-than-expected US factory and jobs data earlier this week, which eased market fears about a double-dip recession in the world’s biggest economy.
Investors awaited a flood of Chinese data as early as this week that is expected to show continued moderation in economic growth in August, another bumper trade surplus and an increase in inflation.
Investors have bought Asian stocks and bonds, expecting the region to continue to outperform the rest the world. Shanghai stocks have rallied 13% since early July as fears of a abrupt slowdown in the economy eased.
US financial markets were closed on Monday for the Labor Day holiday and will resume trading later in the day.
The euro slid from a three-week peak against the dollar scaled the previous day, as rekindled worries about the European banking sector prompted investors to cut risks.
The euro shed half of a percent to $1.2810 after triggering stop-loss orders in the $1.2850-60 area, after a Wall Street Journal report stoked fears about the viability of European banks by highlighting the weakness of euro zone stress tests earlier in the year.
“Concerns about euro zone banks have been growing again, hitting investor sentiment that had improved a little after better-than-expected US jobs data last week,” said Tsutomu Soma, senior manager of the foreign securities department at Okasan Securities.
“The trend in the euro might have changed as the market’s mood as shifting back toward risk reduction.”
The yen was steady against the dollar remaining within sight of a 15-year high, as investors are keen to buy safe-haven currencies, such as the Japanese currency and the Swiss franc.
The Bank of Japan concludes its two-day policy meeting later in the day and is expected to hold off on easing monetary policy this time.
Gold eased $1.55 to $1,248.00 as early buying subsided and the euro slipped against the dollar.
Oil fell 60 cents to $74 a barrel, extending losses as the dollar rose broadly and tropical storm Hermine showed no signs of disrupting crude or refining output around the Gulf of Mexico.
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First Published: Tue, Sep 07 2010. 10 25 AM IST
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