Small US gains give lift to Asian stocks

Agence France Presse

Posted at Aug 26 2010 11:31 AM | Updated as of Aug 26 2010 07:31 PM

HONG KONG  - A rise on Wall Street gave Asian markets a lift on Thursday while the possibility of intervention in the currency market by the Japanese government lent much-needed support to the dollar and euro.

But sentiment was still fragile on concerns over the global economy after a fresh set of downbeat data out of the United States.

Tokyo was 0.51% higher by the break and Sydney added 0.41% while Seoul was 0.40% higher and Hong Kong and Shanghai were flat.

Regional traders took their cue from a 0.2% gain on the Dow, which ended a four-day losing streak caused by a stream of recent data pointing to a downward trend for the world's biggest economy.

"With the recent decline in global equity markets, there is a widespread view that shares in general are undervalued so even a minor catalyst will trigger a technical rebound," Hiroichi Nishi, general manager at Nikko Cordial Securities in Tokyo, told Dow Jones Newswires.

The Dow's rise belied more woeful data. The US Commerce Department Wednesday said new home sales in July plunged 12.4% month on month to the lowest level since 1963, shattering analysts' expectations for a modest rise.

That came on top of another report showing a 0.3% rise in orders for manufactured durable goods -- such as planes, cars, refrigerators and computers. Forecasts had been for a 3% jump.

The rise was helped by transportation equipment, mostly non-defence aircraft and parts. Excluding transportation, new orders slumped 3.8%.

However, the dollar held up in Asia Thursday on speculation that Tokyo may intervene to check the yen's strength.

The dollar, which this week plunged into the mid-83 yen range to a new 15-year low against the Japanese unit, fetched 84.63 yen in Tokyo, almost in line with its levels in New York late Wednesday.

The euro edged up to $1.2662  from $1.2655  in New York and to 107.17 yen from 107.02.

Market players "cannot push with yen buying due to caution against intervention and monetary easing" by Japan, said Mizuho Corporate Bank market economist Daisuke Karakama.

Japanese leaders are under pressure to stop the yen rising further and have been accused of being to slow to act, with exporters being hit hardest as their products become more expensive overseas.

Gold surged to $1,239.20-$1,240.20  an ounce on opening as nervy traders headed for the safe-haven metal as stock and currency markets remain weak. It had closed at $1,231.30-$1,232.30 on Wednesday.

Oil was up in Asian trade, with New York's main contract, light sweet crude for delivery in October, gaining 35 cents to $72.87 a barrel.

Brent North Sea crude for October delivery, advanced 30 cents to $73.78.