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Asian stocks up on US data, euro near 2-month peak

Asian stocks up on US data, euro near 2-month peak
AP
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First Published: Tue, Jul 27 2010. 10 21 AM IST
Updated: Tue, Jul 27 2010. 10 21 AM IST
Hong Kong: Asian stocks rose to their highest in two and a half months on Tuesday, boosted by solid US housing data, while the euro inched up towards two-month peaks on relief over stress tests on European banks.
High-yielding currencies like the Australian and New Zealand dollars held near recent highs and the dollar stabilised after retreating against the yen on Monday.
“The environment is gradually improving, after US new home sales data and European banks’ stress tests, but investors are still not entirely convinced that the recovery is solid,” said Soichiro Monji, chief strategist at Daiwa SB Investments.
“The yen has yet to weaken properly either.”
The dollar was trading just below 87 yen after falling 0.7 percent in the previous session.
The euro crawled up above key resistance of 1.30 with sentiment buoyed after the stress tests. Analysts are now eyeing a 2-month high of $1.3029 hit last week as the next test.
The MSCI index of Asia Pacific ex-Japan stocks was up 0.4%, led by gains in the technology and consumer durables sectors.
The index is down just 2% in the year to date, and could return to the black this week, although earnings from Asian corporate heavyweights hold the key to further gains.
Japan’s benchmark Nikkei edged up above 9,520, a key technical resistance, but slipped back amid worries about a firm yen hitting exporters..
Overnight, Wall Street finished higher after new home sales in June logged a surprising jump and package delivery and business services company FedEx Corp’s, an economic bellwether, upgraded its quarterly and full-year earnings forecasts.
Asian corporate reporting season enters its busy phase this week amid expectations of robust results for the April-June reporting period, though the picture in the months ahead looks murkier.
Among those reporting during the day are Indian energy major Reliance Industries and Japan’s Canon Inc and Daiwa Securities.
Bucking the trend, Shanghai’s composite, already the worst performer in Asia this year, fell 0.4% after a report the city’s banks are facing rising default risks on loans to real estate developers.
The mood was already jittery after a report the previous day that almost a quarter of China’s local government debt is at risk of defaulting.
Shanghai’s index is down more than 21% in the year to date despite a six-session rising streak which has taken it to month highs.
The Aussie was trading at $0.9020 close to an 11-week peak and the kiwi hovered at $0.7344, not far from a six-month high.
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First Published: Tue, Jul 27 2010. 10 21 AM IST
More Topics: Markets | Asia | Stocks | Nikkei | Hang Seng |