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Stocks Jump in Asia, Dlr Stumbles
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By Bill Tarrant
SINGAPORE (Reuters) - Stocks charged ahead in Asia on Monday after another Wall Street rally, while the dollar retreated from earlier gains to await reports about currency discussions at a summit of rich nations in France.
Gold shed almost $3 an ounce in Asian trade as safe haven investments lost some luster and the dollar tried to mount a counterattack on the resurgent euro.
Oil prices sparked to a six-week high as low U.S. gasoline stocks and a possible cut in OPEC (news - web sites) supplies rekindled the market. Tokyo's Nikkei average closed above the 8,500 level for the first time in three months, gaining 1.46 percent to 8,547.17, invigorated by a softening yen and brighter outlook in the United States, Japan's biggest export market. Technology issues were snapped up after reports showing strong manufacturing growth in the U.S. Midwest and consumer confidence at its highest level in a year fired up U.S. stocks. The tech-laden Nasdaq closed at its highest level in a year on Friday.
"I don't see the Nasdaq rally going for much longer but it may last another two weeks to one month," said Tetsuro Miyachi, a portfolio manager at Franklin Templeton Investments.
"And that should keep money flowing into Japanese techs."
BROKERAGES IN THE MONEY
Brokerages, led by Nomura Holding's 6.7 percent gain, also galloped ahead on the improving stock market.
Tech shares led the gainers in other Asian markets as well.
South Korea (news - web sites) closed up 2.4 percent at a four-and-a-half month high with LG Electronics whizzing up eight percent. Taiwan ended three percent higher with United Microelectronics gaining seven percent. Australia closed 0.9 percent higher.
Hong Kong shares were up 1.27 percent and Singapore 2.27 percent in mid-afternoon trading. The broad Morgan Stanley Asia Pacific Free Index was up 1.62 percent.
With stagnation or worse threatening some of the Group of Eight economies -- particularly Germany, Japan and Italy -- Italian Prime Minister Silvio Berlusconi acknowledged on Sunday currencies would be discussed during Monday's summit session.
The dollar gave up initial gains on that report, as currency traders scratched their heads over what effect the summit might have on the market if the leaders did discuss currency issues.
At 0630 GMT, the dollar was quoted around 119.00 yen versus 119.21/29 in late U.S. trading on Friday.
RATE CUT IN EUROPE
Japan, which spent a record $33.36 billion last month propping up the yen, is expected to keep the dollar from weakening much further.
Against the euro, the dollar was trading at $1.1721 compared with $1.1782 in late U.S. trading.
Dealers saw more room for the euro to weaken, possibly to $1.15 later this week, with many expecting the European Central Bank to cut rates at its meeting on Thursday.
U.S. Treasury yields crept up in Asian trade as the rally in stocks and nascent signs of a U.S. economic recovery have lured investors out of their financial safe havens.
The 10-year note was yielding 3.4196 percent in Tokyo trade versus 3.37 percent in New York on Friday.
Spot gold was trading at $361.25 an ounce at 0230 GMT, compared with $364.60 in New York.
Crude oil for July delivery had gained 29 cents to $29.85, its highest since mid-April. |
