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GLOBAL MARKETS-Asian shares edge higher on U.S. growth data

by on October 29, 2012 3:26 am GMT
 

Sun Oct 28, 2012 11:26pm EDT

* MSCI Asia ex-Japan, Nikkei both up 0.2 pct

* Dollar up 0.1 pct vs yen, steadies against euro

By Chikako Mogi

TOKYO, Oct 29 (Reuters) – Asian shares edged higher on
Monday as investors took comfort in signs of stable growth in
the United States, though caution over the uncertain global
corporate earnings outlook capped prices.

The MSCI index of Asia-Pacific shares outside Japan
added 0.2 percent after shedding 1 percent on
Friday and posting its biggest weekly drop in two months, 1.3
percent.

Australian shares rose 0.6 percent, buoyed by solid
U.S. economic growth in the third quarter, while South Korean
shares rose 0.3 percent, supported by solid earnings
from IT firms and a better U.S. outlook. Hong Kong and
Shanghai shares were marginally down.

“The late rally in U.S. markets is likely to set a firm tone
as our market corrects,” said Ric Spooner, chief market analyst
at CMC Markets, referring to the Australian stock market which
posted its biggest weekly fall since May last week.

Japan’s Nikkei average was up 0.2 percent after
tumbling 1.3 percent on Friday.

The dollar inched up 0.1 percent to 79.72 yen, off a
four-month high of 80.38 yen touched on Friday, but
supported by expectations the Bank of Japan will take further
easing measures at its policy meeting on Tuesday.

U.S. GDP grew at a 2 percent annual rate in the third
quarter, slightly above a 1.9 percent forecast, and picking up
from the second quarter’s 1.3 percent rise. But the stronger
pace of expansion fell short of what is needed for a substantial
rise in employment.

European shares eked out gains on Friday after the U.S. data
but U.S. equities ended largely flat, weighed down by poor
earnings outlooks from major companies such as Apple,
Amazon and South Korea’s Samsung Electronics
.

Over the weekend, China said industrial profits rose 7.8
percent in September from a year earlier to 464.3 billion yuan
($74 billion), compared with a 6.2 percent drop in August,
signalling some stability in the world’s second-largest economy.

“Overall it suggests a continued period of subdued risk
reduction bidding the U.S. dollar higher,” said Societe Generale
analyst Sebastien Galy.

Data showed that U.S. bond speculators scaled back their
bullish bets on U.S. Treasuries futures early last week, even as
worries about Spain and disappointing company earnings supported
the bond market. Commodity Futures Trading Commission data
released on Friday also showed currency speculators cut their
bets against the U.S. dollar in the same week to the lowest
since early September.

The dollar index measured against a basket of six
major currencies hit a near seven-week high of 80.270 on Friday
and was still hovering near that level at 80.074 on Monday.

MONEY PULLED OUT

Data from EPFR Global showed that investors pulled the most
money out of U.S. stock funds in the past week than at any point
in more than a year, an indication that many still harbour deep
concerns about the global economy.

“Investors are taking on more risk,” EPFR Global Research
Director Cameron Brandt said in a note. “But they are doing so
largely within the fixed income universe and, when it comes to
equities, bypassing the U.S. in favour of emerging markets.”

Bullish bets on U.S. commodities by hedge funds and other
big speculators have fallen to a near 2-1/2-month low, trade
data showed on Friday, as oil and gold saw heavy selling for a
second straight week.

U.S. crude futures fell 0.3 percent to $86.05 a
barrel and Brent eased 0.2 percent to $109.38.

The euro was down 0.1 percent to $1.2932, recovering
from a two-week low of $1.28825 hit on Friday. The single
currency has been trading in a broad range between $1.28 and
$1.31, waiting for bailout prospects for struggling Spain and
Greece to become clear.

Some traders said concerns about disruptions from Hurricane
Sandy approaching the East Coast could keep trading somewhat
subdued in Asia.