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GLOBAL MARKETS-Asia shares set for best week in 2 months as outlook improves

by on November 23, 2012 6:15 am GMT
 

Fri Nov 23, 2012 1:15am EST

* MSCI Asia ex-Japan up 0.7 pct, set for weekly gain of 2.6
pct

* European shares seen opening flat-to-higher, U.S. futures
up 0.3 pct

* Euro steady around $1.2886, up 1.2 pct on week and near
3-week high

* Brent crude eases but holds above $110, up 1.3 pct on week

* Japan closed for holiday, U.S. markets curtailed for
Thanksgiving

By Alex Richardson

SINGAPORE, Nov 23 (Reuters) – Asian shares rose on Friday
and were on course for a weekly gain of more than 2.5 percent,
their best in two months, after manufacturing surveys from the
world’s biggest economies raised hopes that the global growth
outlook is improving at last.

The euro was also enjoying a positive week, despite data on
Thursday pointing to the euro zone sliding into its deepest
recession since 2009, with the currency standing up more than 1
percent from last Friday’s close on optimism that a funding deal
for debt-choked Greece will ultimately be agreed.

“Eventually they will reach a deal,” said Callum Henderson,
global head of FX research for Standard Chartered Bank in
Singapore. “Whether they reach a deal on Monday remains
questionable.”

Financial bookmakers called Europe’s major stock indexes to
open flat or slightly higher, while S&P 500 index futures
firmed 0.3 percent, suggesting small gains when Wall Street
trading resumes for a shortened trading day later.

MSCI’s broadest index of Asia Pacific shares outside Japan
rose 0.7 percent, with shares in South Korea
and Hong Kong both rising more than 0.5 percent
while Australian stocks were flat.

The MSCI index was up around 2.6 percent on the week, its
best weekly performance since mid-September.

Activity generally was subdued, with Japanese financial
markets closed for a holiday on Friday following the U.S.
shutdown for Thanksgiving on Thursday.

Confidence in the global economic outlook was lifted on
Thursday by the HSBC flash manufacturing Purchasing Managers
Index (PMI) for China, which showed expansion in the factory
sector accelerating for the first time in 13 months.

That followed Wednesday’s report showing U.S. manufacturing
grew in November at its quickest pace in five months, indicating
strong economic growth in the fourth quarter, and helped sustain
a rally in riskier assets such as stocks and commodities.

PMI data on the manufacturing and services sectors in
Europe’s two biggest economies, Germany and France, also
reassured investors on Thursday by revealing that conditions had
at least not worsened in November, although both economies were
still contracting.

However, the PMI numbers for the wider euro zone remained
extremely weak, pointing to its recession-hit economy shrinking
by about 0.5 percent in the current quarter – its sharpest
contraction since the first quarter of 2009.

GREEK RISKS

The euro was steady against the dollar around
$1.2886, within sight of Thursday’s three-week high of $1.2899.

The single currency was boosted by expectations that
international lenders will soon reach a deal to release the next
tranche of aid for Greece, although some market players remained
cautious about the risks still posed by Europe’s debt crisis.

“Greek exit (from the euro zone) is very unlikely this
weekend, but I don’t want to go into this weekend holding any
risky positions,” said RBS strategist Greg Gibbs in a note.

“In fact, while much ink has been spilled on the U.S.
fiscal cliff, the bigger risk is still cracks appearing again in
Europe.”

The euro dipped 0.1 percent versus the yen to 106 yen
, backing away from a six-and-a-half-month high of
106.585 yen set on Thursday.

The dollar eased 0.2 percent versus the yen to 82.25 yen
, pulling away from Thursday’s high of 82.84 yen, the
dollar’s strongest level since early April.

The dollar has climbed around 3.5 percent against the yen in
the last two weeks, with the yen weakened by market expectations
that the likely next Japanese government would push the Bank of
Japan to implement more drastic monetary stimulus.

Oil dipped, with the prospect of weak demand from
recession-mired Europe and the easing of supply concerns
following the ceasefire in Gaza weighing on prices, although
Brent crude remained up more than 1 percent on the week.

“I think what we’re seeing in oil markets at the moment is a
re-pricing after the ceasefire in the Gaza Strip,” said Ben Le
Brun, a market analyst at OptionsXpress.

Brent slipped 0.2 percent to $110.36 a barrel and
U.S. benchmark crude eased a similar percentage to
$87.22.

Copper also eased 0.2 percent to just above 7,700 a
tonne, but remained up more than 1 percent on the week.

Gold was flat around $1,730 an ounce.