Asian shares rise, dollar rally stalled

Asian shares rise, dollar rally stalled

Singapore: Asian stocks rose on Thursday led by gains in technology shares, while the US dollar edged further away from recent peaks after an unexpected drop in US home sales cooled optimism about the economic recovery.

Gold prices gained 1% to $1,097.65, adding to the previous day’s 1% gain spurred by the dollar’s retreat and after sliding to a seven-week low on Tuesday.

The MSCI index of Asia Pacific stocks outside Japan rose 1% but trading was thinned ahead of the Christmas and New Year holidays.

The Shanghai Composite Index led the regional gains, jumping 1.9% and extending its rebound from its lowest in seven weeks hit on Tuesday.

The Thomson Reuters index of Asia ex-Japan equities was up 0.9%.

Japan’s Nikkei jumped 1.6% to its highest in three months, lifted by high-tech exporters such as Advantest on a weaker yen and after better-than-expected earnings from US peers.

“Investors are welcoming gains in US stocks and stabilising currency moves. The solid performance of US technology stocks is particularly positive for the tech-heavy Nikkei average," said Yutaka Miura, a senior technical analyst at Mizuho Securities.

US technology shares rose on Wednesday after solid earnings from Micron Technology Inc and Red Hat Inc, but the broader market’s gains were capped by the home sales data.

Sales of newly built US single-family homes unexpectedly dropped 11.3% last month to a 355,000 unit annual rate, analysts had forecast an increase to 440,000 units.

The data reminded investors that the path to a recovery will be bumpy, one day after a larger-than-expected jump in sales of existing US homes fueled a market rally.

The dollar hovered below a three-month peak against the euro and two-month high on the yen hit earlier this week. The dollar index, a gauge of its performance against six other major currencies, was also sitting below this week’s three-month high.

The euro is on course for its biggest monthly fall against the dollar since January and was holding just above its weakest levels since early September after dipping near $1.42 this week. For further direction, investors will focus on weekly US jobless claims due at 1330 GMT to see whether a recent improvement in monthly payrolls will be sustained. Economists in a Reuters survey forecast a total of 470,000 new filings in the week ended 19 December compared with 480,000 in the previous week.

US crude oil for February delivery gained 71 cents, or 0.9%, to $77.38 a barrel, after jumping 3% in the previous day, driven by a weak dollar and US data showing a fall in crude oil stockpiles last week.